Eliciting Subjective Probabilities with Binary Lotteries

Glenn Harrison, Jimmy Martínez-Correa and J. Todd Swarthout
Authors registered in the RePEc Author Service: Jimmy Martínez-Correa ()

No 2012-16, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: We evaluate the binary lottery procedure for inducing risk neutral behavior in a subjective belief elicitation task. Harrison, Martinez-Correa and Swarthout [2013] found that the binary lottery procedure works robustly to induce risk neutrality when subjects are given one risk task defined over objective probabilities. Drawing a sample from the same subject population, we find evidence that the binary lottery procedure induces linear utility in a subjective probability elicitation task using the Quadratic Scoring Rule. We also show that the binary lottery procedure can induce direct revelation of subjective probabilities in subjects with certain Non-Expected Utility preference representations that satisfy weak conditions that we identify.

Pages: 52
Date: 2012-09, Revised 2014-06
New Economics Papers: this item is included in nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2012-16.pdf First version, 2012 (application/pdf)
http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2015-05.pdf Revised version, 2015 (application/pdf)

Related works:
Journal Article: Eliciting subjective probabilities with binary lotteries (2014)
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