Evaluating Strategic Forecasters
- (pp. 3057-3103)
AbstractMotivated by the question of how one should evaluate professional election forecasters, we study a novel dynamic mechanism design problem without transfers. A principal who wishes to hire only high-quality forecasters is faced with an agent of unknown quality. The agent privately observes signals about a publicly observable future event, and may strategically misrepresent information to inflate the principal's perception of his quality. We show that the optimal deterministic mechanism is simple and easy to implement in practice: it evaluates a single, optimally timed prediction. We study the generality of this result and its robustness to randomization and noncommitment.
CitationDeb, Rahul, Mallesh M. Pai, and Maher Said. 2018. "Evaluating Strategic Forecasters." American Economic Review, 108 (10): 3057-3103. DOI: 10.1257/aer.20170299
- C53 Forecasting Models; Simulation Methods
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 Asymmetric and Private Information; Mechanism Design