American Economic Journal: Microeconomics
no. 1, February 2016
This paper uses a Bayesian information processing task to compare belief elicitation mechanisms including a quadratic scoring rule, a Becker-DeGroot-Marschak pricing procedure, and a two-stage menu of lottery choices that is structured to identify a precise point of probability indifference. The choice menu yields a higher incidence of correct Bayesian responses and lower belief error averages. Unlike the quadratic scoring rule, the binary payoffs for the lottery choice mechanism are synchronized to provide theoretical incentive-compatibility regardless of risk attitudes. In addition, the choice menu structure is more transparent and intuitive than the Becker-DeGroot-Marschak procedure. (JEL C91, D44, D81, D83)
Holt, Charles A., and Angela M. Smith.
"Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes."
American Economic Journal: Microeconomics,
Design of Experiments: Laboratory, Individual
Criteria for Decision-Making under Risk and Uncertainty
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness