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  3. American Economic Review
  4. April 2019
  5. Delegated Expertise, Authority, and Communication

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Delegated Expertise, Authority, and Communication

  • Inga Deimen
  • Dezső Szalay
American Economic Review
vol. 109, no. 4, April 2019
(pp. 1349–74)
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Abstract

A decision maker needs to reach a decision and relies on an expert to acquire information. Ideal actions of expert and decision maker are partially aligned and the expert chooses what to learn about each. The decision maker can either get advice from the expert or delegate decision making to him. Under delegation, the expert learns his privately optimal action and chooses it. Under communication, advice based on such information is discounted, resulting in losses from strategic communication. We characterize the communication problems that make the expert acquire information of equal use to expert and decision maker. In these problems, communication outperforms delegation.

Citation

Deimen, Inga, and Dezső Szalay. 2019. "Delegated Expertise, Authority, and Communication." American Economic Review, 109 (4): 1349–74. DOI: 10.1257/aer.20161109

Additional Materials

JEL Classification

  • D82 Asymmetric and Private Information; Mechanism Design
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness