Markets for Theories

Aurélien Baillon (), Aysil Emirmahmutoglu, Benjamin Tereick and Tong V. Wang
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Aurélien Baillon: EM - EMLyon Business School, GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - UJM EPE - Université Jean Monnet (EPSCPE) - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique
Aysil Emirmahmutoglu: NHH - Norwegian School of Economics and Business Administration, Department of Economics - Norwegian School of Economics and Business Administration

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Abstract: How much is a theory worth? We provide the first measure of the credence people assign to a theory, inferred from their willingness to bet on it. We introduce two market mechanisms: in an explicit theory market, a theory is priced as a portfolio of bets on the hypotheses it predicts; in an implicit theory market, traders report a credence directly and are matched with others reporting similar credences, with payoffs tied to the hypothesis-market behavior of the match. What the implicit mechanism elicits is invariant to which hypotheses happen to be testable. We demonstrate feasibility by implementing both mechanisms in a mobile-app experiment built around the real-effort study of DellaVigna and Pope (2018b). Theory-market prices reflect the relative restrictiveness of the four theories considered, and the two mechanisms produce broadly comparable measures of theory credence.

Date: 2026-08-18
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