Supplementary Appendix to 'A Delegation-Based Theory of Expertise'

This supplement provides welfare results not contained in the main text and a proof of Lemma A.1. For small bonuses, a mixed equilibrium exists if and only if a downward equilibrium exists; if so, it is unique. For large bonuses, we find a unique candidate for mixed equilibrium and show that mixed and upward equilibria cannot co-exist. Also, we give an example for equal biases, where this candidate is indeed a mixed equilibrium. However, when biases are different enough and the bonus is high, a mixed equilibrium does not exist. Though a general analytical comparison is infeasible, we show that mixed equilibria are inferior to upward equilibrium or simple delegation in various special cases.

Duke Scholars

Author Attila Ambrus Economics