Belief Elicitation and Behavioral Incentive Compatibility
American Economic Review
vol. 112,
no. 9, September 2022
(pp. 2851-83)
Abstract
Subjective beliefs are crucial for economic inference, yet behavior can challenge the elicitation. We propose that belief elicitation should be incentive compatible not only theoretically but also in a de facto behavioral sense. To demonstrate, we show that the binarized scoring rule, a state-of-the-art elicitation, violates two weak conditions for behavioral incentive compatibility: (i) within the elicitation, information on the incentives increases deviations from truthful reporting; and (ii) in a pure choice over the set of incentives, most deviate from the theorized maximizer. Moreover, we document that deviations are systematic and center-biased, and that the elicited beliefs substantially distort inference.Citation
Danz, David, Lise Vesterlund, and Alistair J. Wilson. 2022. "Belief Elicitation and Behavioral Incentive Compatibility." American Economic Review, 112 (9): 2851-83. DOI: 10.1257/aer.20201248Additional Materials
JEL Classification
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making