Eliciting beliefs: Proper scoring rules, incentives, stakes and hedging

Olivier Armantier and Nicolas Treich

European Economic Review, 2013, vol. 62, issue C, 17-40

Abstract: Proper Scoring Rules (PSRs) are popular incentivized mechanisms to elicit an agent's beliefs. This paper combines theory and experiment to characterize how PSRs bias reported beliefs when (i) the PSR payments are increased, (ii) the agent has a financial stake in the event she is predicting, and (iii) the agent can hedge her prediction by taking an additional action. In contrast with previous literature, the PSR biases are characterized for all PSRs and all risk averse agents. Our results reveal complex distortions of reported beliefs, thereby raising concerns about the ability of PSRs to recover truthful beliefs in general decision-making environments.

Keywords: Belief elicitation; Scoring rules; Experimental economics (search for similar items in EconPapers)
JEL-codes: C91 D81 D84 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (103)

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Related works:
Working Paper: Eliciting Beliefs: Proper Scoring Rules, Incentives, Stakes and Hedging (2010)
Working Paper: Eliciting Beliefs: Proper Scoring Rules, Incentives, Stakes and Hedging (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:62:y:2013:i:c:p:17-40

DOI: 10.1016/j.euroecorev.2013.03.008

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