Abstract
How do people choose economic advice? We develop a set of validated questions on economic policy to examine the persuasiveness of expert versus populist advice. Populists, in our con text, conform to commonly held beliefs, even when wrong. Two computerized advisers suggest answers to each question, and experimental participants are incentivized to choose the most accurate adviser. Do participants choose the high-accuracy adviser (‘the Expert’), or the low accuracy one (‘the Charlatan’), whose answers are designed to be similar to the modal participant’s? Our participants overwhelmingly choose the Charlatan. Revealing the Charlatan’s exact modus operandi to debias behavior scarcely helps. Sequential feedback on the correct answer improves choices only slowly and partially. Bayesian choice models fail to explain behavior; a naive choice model akin to reinforcement learning with high inertia fits behavior well.
Author: Zacharias Maniadi