This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Journal: Microeconomics
  4. February 2016
  5. Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes

Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes

  • Charles A. Holt
  • Angela M. Smith
American Economic Journal: Microeconomics
vol. 8, no. 1, February 2016
(pp. 110-39)
Download Full Text PDF

Abstract

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)

Citation

Holt, Charles A., and Angela M. Smith. 2016. "Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes." American Economic Journal: Microeconomics, 8 (1): 110-39. DOI: 10.1257/mic.20130274

Additional Materials

JEL Classification

  • C91 Design of Experiments: Laboratory, Individual
  • D44 Auctions
  • D81 Criteria for Decision-Making under Risk and Uncertainty
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
There are no comments for this article.
Login to Comment