Reputational Conservatism in Expert Advice

Abstract: We study expert recommendations under career concerns in a continuous signal environment. An expert observes a private signal about a binary payoff and recommends risky or safe; recommendations and outcomes are public and affect reputation and implementation. Equilibrium advice follows a cutoff rule. Under a mild relative-diagnosticity condition, the cutoff increases with reputation (reputational conservatism); informativeness and priors lower the cutoff while stronger career concerns raise it. A success-contingent bonus provides a one-to-one mapping to experimentation. The theory predicts fewer risky recommendations but higher conditional hit rates for high-reputation experts and yields implementable levers for committees and monitoring.