November 7, 2007
Schneider on Experts
Professor Schneider has, as reported in todays New York Times, a study on how we rely on experts. He found that a very small percentage of car mechanics fixed his automobile correctly (he had loosened a battery cable and drained some coolant from his car to create symptoms). His conclusion: that we often have trouble relying on experts. Advocates for government controlled health care are using his paper to make arguments about the need for health care regulation. I would suggest an addendum: We choose to rely on experts that fix the problem even if they overcharge because the cost of failure or of a second opinion and then resolving the disputed among experts may be higher than a success even if we are overcharged. The market severely penalizes failure and may penalize price as much. But we need the use of a car and may be willing to pay for a new battery if the car is fixed, even though tightening the battery cable will do. If a doctor fixes my pain, I may not care if I am overcharged a bit. I may prefer it to a doctor who does not fix my pain (or a system that takes an extra six months to fix my pain).
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