Nonmanipulable Bayesian Testing

Colin Stewart

Working Papers from University of Toronto, Department of Economics

Abstract: This paper considers the problem of testing an expert who makes probabilistic forecasts about the outcomes of a stochastic process. I show that, under general conditions on the tester's prior, a likelihood test can distinguish informed from uninformed experts with high prior probability. The test rejects informed experts on data-generating processes where the tester quickly learns the true probabilities by updating her prior. However, the set of processes on which informed experts are rejected is topologically small. These results contrast sharply with many negative results in the literature.

Keywords: Probability forecasts; testing; experts (search for similar items in EconPapers)
JEL-codes: C44 D81 D83 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2009-06-24
New Economics Papers: this item is included in nep-ecm and nep-for
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Nonmanipulable Bayesian testing (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-360

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