J. Scott Armstrong, 1980:
People are willing to pay heavily for expert advice. Economists are consulted to tell us how the economy will change, stock analysts are paid large salaries to forecast the earnings of various companies, and political experts command large fees to tell our leaders what the future holds. The available evidence, however, implies that this money is poorly spent. But because few people pay attention to this evidence, I have come up with what I call the “seer-sucker theory”: “No matter how much evidence exists that seers do not exist, suckers will pay for the existence of seers.”
Assume for a moment that the seer-sucker theory is true – that expertise is useless in forecasting change. Is there any rational explanation for why clients continue to purchase worthless information?
One explanation is that the client is not interested in accuracy, but only in avoiding responsibility. A client who calls in the best wizard available avoids blame if the forecasts are inaccurate. The evasion of responsibility is one possible explanation for why stock market investors continue to purchase expert advice in spite of overwhelming evidence that such advice is worthless.