Eliciting subjective probabilities with binary lotteries

Glenn Harrison, Jimmy Martínez-Correa and J. Swarthout

Journal of Economic Behavior & Organization, 2014, vol. 101, issue C, 128-140

Abstract: We evaluate a binary lottery procedure for inducing risk neutral behavior in a subjective belief elicitation task. Prior research has shown this procedure to robustly induce risk neutrality when subjects are given a single risk task defined over objective probabilities. Drawing a sample from the same subject population, we find evidence that the binary lottery procedure also induces linear utility in a subjective probability elicitation task using the Quadratic Scoring Rule. We also show that the binary lottery procedure can induce direct revelation of subjective probabilities in subjects with popular non-expected utility preference representations that satisfy weak conditions.

Keywords: Subjective probability elicitation; Binary lottery procedure; Experimental economics; Risk neutrality (search for similar items in EconPapers)
JEL-codes: C81 C91 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Working Paper: Eliciting Subjective Probabilities with Binary Lotteries (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:101:y:2014:i:c:p:128-140

DOI: 10.1016/j.jebo.2014.02.011

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