Working Paper: NBER ID: w24994
Authors: Matthew Backus; Andrew Little
Abstract: Experts with reputational concerns, even good ones, are averse to admitting what they don’t know. This diminishes our trust in experts and, in turn, the role of science in society. We model the strategic communication of uncertainty, allowing for the salient reality that some questions are ill-posed or unanswerable. Combined with a new use of Markov sequential equilibrium, our model sheds new light on old results about the challenge of getting experts to admit uncertainty – even when it is possible to check predictive success. Moreover, we identify a novel solution: checking features of the problem itself that only good experts will infer – in particular, whether the problem is answerable – allows for equilibria where uninformed experts do say “I Don’t Know.”
Keywords: expertise; uncertainty; decision-making; reputation
JEL Codes: D8; D83; L22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Experts' willingness to admit uncertainty (D80) | Decision-maker learns post hoc whether the question was well-formulated (D80) |
| Validation of problem's difficulty (C62) | Experts' willingness to admit uncertainty (D80) |
| Validation of problem's difficulty (C62) | Improved decision-making outcomes (D91) |
| Decision-maker learns post hoc whether the question was well-formulated (D80) | Experts' willingness to admit uncertainty (D80) |
| Experts' reputational concerns (D82) | Distorted advice and poor decision-making by executives (D80) |