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Belief elicitation when more than money matters

Jean-Pierre Benoît, Juan Dubra () and Giorgia Romagnoli

MPRA Paper from University Library of Munich, Germany

Abstract: Incentive compatible mechanisms for eliciting beliefs typically presume that money is the only argument in people's utility functions. However, subjects may also have non-monetary objectives that confound the mechanisms. In particular, psychologists have argued that people favour bets where their skill is involved over equivalent random bets -- a so-called preference for control. We propose a new belief elicitation method which mitigates the control preference. With the help of this method, we find that under the ostensibly incentive compatible probability matching mechanism (Grether (1981) and Karni (2009)), subjects report beliefs 7% higher than their true beliefs in order to increase their control. Non-monetary objectives account for at least 27% of what would normally be measured as overconfidence. Our paper also contributes to a refined understanding of control.

Keywords: Elicitation; Overconfidence; Control. Experimental Methods (search for similar items in EconPapers)
JEL-codes: D0 D01 D03 (search for similar items in EconPapers)
Date: 2019-08-12
New Economics Papers: this item is included in nep-hpe and nep-upt
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Working Paper: Belief elicitation when more than money matters (2019)
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