Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2012

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At Least Do No Harm

Alvaro Sandroni*

Date: 2012-05-04 12:00 pm – 12:30 pm
Last modified: 2012-04-17

Abstract


A standing question in economics is how to screen informed and uninformed experts with limited data. The key difficulty is that uninformed experts can successfully manipulate tests and scores, no matter how the data unfolds. In spite of this difficulty, simple and straightforward to implement contracts can deliver incentives for informed experts to honestly reveal their views and for uninformed experts to do no harm in the sense that a decision maker can achieve first-best outcomes as if there were no incentive problems between her and the expert. These contracts require no more than a single data point to evaluatethe expert’s advice.