Forecast Dispersion in Finite-Player Forecasting Games

Kim Jin Yeub () and Myungkyu Shim
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Kim Jin Yeub: Department of Economics, University of Nebraska-Lincoln, 730 N. 14th Street, NE 68588-0489Lincoln, United States of America

The B.E. Journal of Theoretical Economics, 2019, vol. 19, issue 1, 6

Abstract: We study forecast dispersion in a finite-player forecasting game modeled as an aggregate game with payoff externalities and dispersed information. In the game, each agent cares about being accurate as well as about the distance of his forecast from the average forecast; and with a finite number of agents, the agents can strategically influence that average. We show that the finiteness of the number of agents weakens the strategic effect induced by the underlying preference. We find that when each agent prefers to be close to the average forecast, the presence of strategic manipulation of the average forecast contributes to a higher forecast dispersion; when instead each agent wants to be distinctive from the average, the opposite is true.

Keywords: forecast dispersion; finite-player; aggregate games; coordination; incomplete information (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 E37 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/bejte-2017-0023

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