Eliciting and aggregating individual expectations: An experimental study

Ronald Peeters and Leonard Wolk

No 29, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: In this paper we present a mechanism to elicit and aggregate dispersed information. Our mechanism relies on the aggregation of intervals elicited using an interval scoring rule. We test our mechanism by eliciting beliefs about the termination times of a stochastic process in an experimental setting. We conduct two treatments, one with high and one with low volatility. Increasing the underlying volatility affects the location of the interval, yet it does not significantly affect its length. Consequently, individuals perform significantly better in the low volatility treatment than in the high volatility treatment. Next, we construct distributions by aggregating intervals across different individuals. Our results reveal that the predictive quality of the aggregated intervals (as measured by the Hellinger distance to the true distribution) increases by more than 30\% when increasing the aggregation level from two to eight individuals. This shows that aggregating individual intervals may be an attractive solution when market mechanisms are infeasible.

Date: 2014-01-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-for
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cris.maastrichtuniversity.nl/ws/files/7988 ... bc99627-ASSET1.0.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2014029

DOI: 10.26481/umagsb.2014029

Access Statistics for this paper

More papers in Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE) Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Willems () and Leonne Portz ().