will give a presentation on
An expert advises a sequence of principals on their actions to match a hidden,randomly evolving state. The expert privately knows her competence. Theprincipals learn about the state and the expert’s competence from past adviceand past action outcomes, both publicly observable. I find that the equilibriumcan feature a “crisis of expertise,” in which principals dismiss a competentexpert’s correct advice, and rely only on public information. Notably, the crisishappens precisely when the quality of public information is low, and thus whenthe competent expert’s knowledge is much needed. I discuss policy implicationsfor alleviating the crisis.