The Quality of Expertise: we should expect experts to be systematically biased, potentially to the point that they are less reliable sources of information than non-experts

The Quality of Expertise

Edward Dickersin Van Wesep Vanderbilt University – Owen Graduate School of Management

May 7, 2013
Vanderbilt Owen Graduate School of Management Research Paper No. 2257995

Policy-makers and managers often turn to experts when in need of information: because they are more informed than others of the content and quality of current and past research, they should provide the best advice. I show, however, that we should expect experts to be systematically biased, potentially to the point that they are less reliable sources of information than non-experts. This is because the decision to research a question implies a belief that research will be fruitful. If priors about the impact of current work are correct, on average, then those who select into researching a question are optimistic about the quality of current work. In areas that are new, or feature new research technologies (e.g., data sources, technical methods, or paradigms), the selection problem is less important than the benefit of greater knowledge: experts will indeed be experts. In areas that are old and lack new research technologies, there will be significant bias. Furthermore, consistent with a large body of empirical research, this selection problem implies that experts who express greater confidence in their beliefs will be, on average, less accurate. This paper provides many empirical implications for expert accuracy, as well as mechanism design implications for hiring, task assignment, and referee assignment.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: