The Value of Biased Information: A Rational Choice Model of Political Advice

Typically, political decision making involves the concomitant problem of deciding how to use advice. Advice can reduce uncertainty about outcomes, but it is often costly to obtain and assimilate, and is itself subject to uncertainty and error. This paper explores how a rational decision maker uses imperfect advice. Using only the assumption of utility maximization, along with a specification of exactly how knowledge and advice are "imperfect," it is possible to derive some of the initial assumptions of cognitive and bounded-rationality models. Also changes in the decision-making environment can be connected to changes in how advice is used, thereby providing theoretical predictions about political behavior. In particular it is shown here that, under certain reasonable circumstances, the rational decision maker should engage in selective exposure or "bolstering." These results do not depend upon any cost advantage or inherent value in biased advice.

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