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Simple bets to elicit private signals

Author

Listed:
  • Aurélien Baillon

    (Erasmus University Rotterdam)

  • Yan Xu

    (Universität Wien = University of Vienna)

Abstract

This paper introduces two simple betting mechanisms, Top-Flop and Threshold betting, to elicit unverifiable information from crowds. Agents are offered bets on the rating of an item about which they received a private signal versus that of a random item. We characterize conditions for the chosen bet to reveal the agents' private signal even if the underlying ratings are biased. We further provide micro-economic foundations of the ratings, which are endogenously determined by the actions of other agents in a game setting. Our mechanisms relax standard assumptions of the literature, such as common prior, and homogeneous and risk neutral agents.

Suggested Citation

  • Aurélien Baillon & Yan Xu, 2021. "Simple bets to elicit private signals," Post-Print hal-04325606, HAL.
    • Handle: RePEc:hal:journl:hal-04325606
    DOI: 10.3982/TE4343
    Note: View the original document on HAL open archive server: https://hal.science/hal-04325606
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