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

Charles Holt and Angela M. Smith

American Economic Journal: Microeconomics, 2016, vol. 8, issue 1, 110-39

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)

JEL-codes: C91 D44 D81 D83 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mic.20130274
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Citations: View citations in EconPapers (32)

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