Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209949 
Year of Publication: 
2010
Series/Report no.: 
Working Paper No. 2010/04
Publisher: 
Norges Bank, Oslo
Abstract: 
Experimental studies on decision making based on advice received from others find that the weight put on the advice is negatively related to the distance between the advice and the decisionmaker's initial opinion. In this paper, we show that the distance effect can follow from rational signal extraction when the decisionmaker has imperfect knowledge about the advisor's competence. What drives the result is the assumption that the decisionmaker is better informed about her own competence than about the advisor's competence.
Subjects: 
distance effect
policy decision making
signal extraction
uncertainty
JEL: 
C11
D78
D82
D83
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-548-9
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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