Belief Elicitation When More Than Money Matters:Controlling for "Control"

Juan Dubra (), Jean-Pierre Benoit and Giorgia Romagnoli

No 2001, Documentos de Trabajo/Working Papers from Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo.

Abstract: Incentive compatible mechanisms for eliciting beliefs typically presume that theutilty of money is state independent, or that money is the only argument in utilityfunctions. However, subjects may have non-monetary objectives that confound themechanisms. In particular, psychologists have argued that people favour bets wheretheir ability is involved over equivalent random bets ña so-called preference for control.We propose a new belief elicitation method that mitigates the control preference. Usingthis method, we determine that under the ostensibly incentive compatiblematchingprobabilities method, our subjects report self-beliefs 18% higher than their true beliefsin order to increase control. Non-monetary objectives account for at least 68% of whatwould normally be measured as overconÖdence. Our mechanism can be used to yieldbetter measurements of beliefs in contexts beyond the study of overconÖdence. Ourpaper also contributes to a reÖned understanding of control. We find that control manifests itself only as a desire for betting on doing well; betting on doing badly isperceived as a negative.

Keywords: Elicitation; OverconÖdence; Control. Experimental Methods (search for similar items in EconPapers)
JEL-codes: D3 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-neu and nep-upt
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Journal Article: Belief Elicitation When More than Money Matters: Controlling for "Control" (2022)
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