Belief Elicitation and Behavioral Incentive Compatibility
David Danz, Lise Vesterlund, Alistair J. Wilson
American Economic Review · 2022 · Volume 112 · Issue 9
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.
Keywords
Search, Learning, Information and Knowledge, Communication, Belief, Unawareness, Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
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