skip to content

Faculty of Economics

Journal Cover

Evans, R. A. and Reiche, S. K.

When Is a Contrarian Adviser Optimal?

American Economic Journal: Microeconomics

Vol. 15 no. 1 pp. 434-466 (2023)

Abstract: We compare contrarian to conformist advice, a contrarian expert being one whose preference bias is against the decision-maker's prior optimal decision. Optimality of an expert depends on characteristics of prior information and learning. If either the expert is fully informed, or if fine information can be acquired cheaply, then for symmetric distributions F of the state a conformist (contrarian) is superior if F is single-peaked (bimodal). If only coarse information can be acquired then a contrarian acquires more on average, hence is superior. If information is verifiable a contrarian has less incentive to hide unfavorable evidence, and again is superior.

JEL Codes: D72, D82, D83, G34, H71, I12, L94

Author links: Robert Evans  

Publisher's Link:

Cambridge Working Paper in Economics Version of Paper: When is a Contrarian Adviser Optimal?, Evans, R. A., Reiche, S. K., (2022)

Papers and Publications

Recent Publications

Onatski, A. and Wang, C. Spurious Factor Analysis Econometrica [2021]

Bhattacharya, D. The Empirical Content of Binary Choice Models Econometrica [2021]

Anagnostopoulos, A., Atesagaoglu, O. E., Faraglia, E. and Giannitsarou, C. Cross-Country Stock Market Comovement: A Macro Perspective Journal of Monetary Economics [2022]

Gallo, E. and Yan, C. Efficiency and Equilibrium in Network Games: An Experiment Review of Economics and Statistics, accepted [2022]