Belief Elicitation: Limiting Truth Telling with Information on Incentives

David Danz, Lise Vesterlund and Alistair Wilson

No 27327, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Belief elicitation is central to inference on economic decision making. The recently introduced Binarized Scoring Rule (BSR) is heralded for its robustness to individuals holding risk averse preferences and for its superior performance when eliciting beliefs. Consequently, the BSR has become the state-of-the-art mechanism. We study truth telling under the BSR and examine whether information on the offered incentives improves reports about a known objective prior. We find that transparent information on incentives gives rise to error rates in excess of 40 percent, and that only 15 percent of participants consistently report the truth. False reports are conservative and appear to result from a biased perception of the BSR incentives. While attempts to debias are somewhat successful, the highest degree of truth telling occurs when information on quantitative incentives is withheld. Consistent with incentives driving false reports, we find that slow release of information decreases truth telling. Perversely, our results suggest that information on the BSR incentives substantially distorts reported beliefs.

JEL-codes: C91 D82 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-exp
Note: AP CF LS PE POL
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Citations: View citations in EconPapers (36)

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Working Paper: Belief Elicitation: Limiting Truth Telling with Information on Incentives (2020)
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