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Eliciting subjective probability distributions with binary lotteries

Author

Listed:
  • Harrison, Glenn W.
  • Martínez-Correa, Jimmy
  • Swarthout, J. Todd
  • Ulm, Eric R.

Abstract

We test in a laboratory experiment the theoretical prediction that risk attitudes have a surprisingly small role in distorting reports from true belief distributions. We find evidence consistent with theory in our experiment.

Suggested Citation

  • Harrison, Glenn W. & Martínez-Correa, Jimmy & Swarthout, J. Todd & Ulm, Eric R., 2015. "Eliciting subjective probability distributions with binary lotteries," Economics Letters, Elsevier, vol. 127(C), pages 68-71.
    • Handle: RePEc:eee:ecolet:v:127:y:2015:i:c:p:68-71
    DOI: 10.1016/j.econlet.2014.12.027
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    References listed on IDEAS

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    1. Steffen Andersen & John Fountain & Glenn Harrison & E. Rutström, 2014. "Estimating subjective probabilities," Journal of Risk and Uncertainty, Springer, vol. 48(3), pages 207-229, June.
    2. James E. Matheson & Robert L. Winkler, 1976. "Scoring Rules for Continuous Probability Distributions," Management Science, INFORMS, vol. 22(10), pages 1087-1096, June.
    3. Harrison, Glenn W. & Martínez-Correa, Jimmy & Swarthout, J. Todd, 2014. "Eliciting subjective probabilities with binary lotteries," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 128-140.
    4. Harrison, Glenn W. & Martínez-Correa, Jimmy & Swarthout, J. Todd, 2013. "Inducing risk neutral preferences with binary lotteries: A reconsideration," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 145-159.
    5. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    6. Harrison, Glenn W. & Martínez-Correa, Jimmy & Swarthout, J. Todd & Ulm, Eric R., 2017. "Scoring rules for subjective probability distributions," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 430-448.
    7. Glenn W. Harrison & Eric Johnson & Melayne M. McInnes & E. Elisabet Rutström, 2005. "Risk Aversion and Incentive Effects: Comment," American Economic Review, American Economic Association, vol. 95(3), pages 897-901, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Di Girolamo, Amalia & Harrison, Glenn W. & Lau, Morten I. & Swarthout, J. Todd, 2015. "Subjective belief distributions and the characterization of economic literacy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 59(C), pages 1-12.
    2. Elias Tsakas, 2022. "Belief identification with state-dependent utilities," Papers 2203.10505, arXiv.org, revised Nov 2022.
    3. Arni, Patrick & Dragone, Davide & Goette, Lorenz & Ziebarth, Nicolas R., 2021. "Biased health perceptions and risky health behaviors—Theory and evidence," Journal of Health Economics, Elsevier, vol. 76(C).
    4. Aragón, Nicolás & Roulund, Rasmus Pank, 2020. "Confidence and decision-making in experimental asset markets," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 688-718.
    5. Ingrid Burfurd & Tom Wilkening, 2022. "Cognitive heterogeneity and complex belief elicitation," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 557-592, April.
    6. Elias Tsakas, 2021. "Identification of misreported beliefs," Papers 2112.12975, arXiv.org.
    7. Tsakas, Elias, 2020. "Robust scoring rules," Theoretical Economics, Econometric Society, vol. 15(3), July.
    8. Linda Babcock & Maria P. Recalde & Lise Vesterlund & Laurie Weingart, 2017. "Gender Differences in Accepting and Receiving Requests for Tasks with Low Promotability," American Economic Review, American Economic Association, vol. 107(3), pages 714-747, March.
    9. Eyting, Markus & Schmidt, Patrick, 2021. "Belief elicitation with multiple point predictions," European Economic Review, Elsevier, vol. 135(C).
    10. Schüssler, Katharina, 2018. "The Influence of Overconfidence and Competition Neglect On Entry Into Competition," Rationality and Competition Discussion Paper Series 87, CRC TRR 190 Rationality and Competition.
    11. Erkal, Nisvan & Gangadharan, Lata & Koh, Boon Han, 2020. "Replication: Belief elicitation with quadratic and binarized scoring rules," Journal of Economic Psychology, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    Subjective belief distributions; Risk attitudes; Experiments;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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