Universität zu Köln

Schottmüller, Christoph ORCID: 0000-0001-6059-1090 (2019). Too good to be truthful: Why competent advisers are fired. J. Econ. Theory, 181. S. 333 - 361. SAN DIEGO: ACADEMIC PRESS INC ELSEVIER SCIENCE. ISSN 1095-7235

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Abstract

A decision maker repeatedly asks an adviser for advice. The adviser is either competent or incompetent and knows his type privately. His preferences are not perfectly aligned with the decision maker's preferences. Over time, the decision maker learns about the adviser's type and will fire him if the adviser is likely to be incompetent. If the adviser's reputation for competence improves, he is less likely to be fired for incompetence but this makes pushing his own agenda more attractive to him. Consequently, very competent advisers are also fired with positive probability because they are tempted to pursue their own goals. The quality of advice can be highest if the adviser's competence is uncertain. (C) 2019 Elsevier Inc. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Schottmüller, Christoph UNSPECIFIED orcid.org/0000-0001-6059-1090 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-149629
DOI:	10.1016/j.jet.2019.03.006
Journal or Publication Title:	J. Econ. Theory
Volume:	181
Page Range:	S. 333 - 361
Date:	2019
Publisher:	ACADEMIC PRESS INC ELSEVIER SCIENCE
Place of Publication:	SAN DIEGO
ISSN:	1095-7235
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Professorship for Microeconomics
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/14962