Reduction in Belief Elicitation
Abstract
The state-of-the-art in eliciting probabilistic beliefs, the Binarized Quadratic
Scoring Rule (BQSR), relies on an easily overlooked preference assumption:
the reduction of compound lotteries. In a lab experiment, we find evidence
that a large majority of people violate the reduction assumption for at least
some compound lotteries involved in the BQSR. We show that people whose
preferences are consistent with reduction are 33% more likely to report accurate
beliefs compared to those whose preferences are not consistent with reduction.
Lastly, we implement a novel Rank-Ordered Elicitation (ROE), which does
not rely on the reduction of compound lotteries, to test whether eliminating
the need for reduction increases the accuracy of reported beliefs. We find no
evidence for this last hypothesis, suggesting that preferences inconsistent with
the reduction of compound lotteries could be proxying for other participant
characteristics that affect accuracy.
Citation
Dustan, Andrew and Koutout, Kristine and Leo, Greg, Reduction in Belief Elicitation
Paper
Reduction in Belief Elicitation