Why do experts give simple advice?

TL;DR

This paper models the strategic decision-making of experts when giving advice, highlighting how reputational risks influence whether they offer simple or detailed guidance.

Contribution

It introduces a formal model explaining why experts often give simple advice due to trade-offs between accuracy and reputational risk.

Findings

Experts prefer simple advice when their payoff is concave in perceived competence.

Providing detailed conditions can expose experts to reputational damage.

The model explains the prevalence of simple advice in expert communication.

Abstract

An expert tells an advisee whether to take an action that may be good or bad. He may provide a condition under which to take the action. This condition predicts whether the action is good if and only if the expert is competent. Providing the condition exposes the expert to reputational risk by allowing the advisee to learn about his competence. He trades off the accuracy benefit and reputational risk induced by providing the condition. He prefers not to provide it -- i.e., to give "simple advice" -- when his payoff is sufficiently concave in the posterior belief about his competence.