Simple bets to elicit private signals

Aurelien Baillon, Yan Xu

Publications: Contribution to journalArticlePeer Reviewed

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.
Original languageEnglish
Pages (from-to)777-797
Number of pages21
JournalTheoretical Economics
Volume16
Issue number3
DOIs
Publication statusPublished - Jul 2021

Austrian Fields of Science 2012

  • 502045 Behavioural economics
  • 502047 Economic theory

Keywords

  • Private signals
  • Elicitation
  • Bayesian game
  • elicitation
  • private signals
  • ROBUST
  • GAMES
  • EQUILIBRIUM
  • IMPLEMENTATION
  • Bets
  • PROSPECT-THEORY
  • D8
  • C9

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