Preselection and expert advice

Abstract

We study the effects of preselection on an expert’s advice about the execution of a project if its execution yields more precise estimates about the expert’s expertise. The introduction of a preselection stage, in which the decision maker evaluates the project before asking for advice, alters the expert’s perception of the problem. We identify conditions under which preselection occurs in equilibrium. We show that if the expert adjusts his behavior, the option to preselect may reduce the expected utility of the decision maker.