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Belief elicitation when more than money matters

Author

Listed:
  • Benoît, Jean-Pierre
  • Dubra, Juan
  • Romagnoli, Giorgia
Abstract
Incentive compatible mechanisms for eliciting beliefs typically presume that money is the only argument in people's utility functions. However, subjects may also have non-monetary objectives that confound the mechanisms. In particular, psychologists have argued that people favour bets where their skill is involved over equivalent random bets -- a so-called preference for control. We propose a new belief elicitation method which mitigates the control preference. With the help of this method, we find that under the ostensibly incentive compatible probability matching mechanism (Grether (1981) and Karni (2009)), subjects report beliefs 7% higher than their true beliefs in order to increase their control. Non-monetary objectives account for at least 27% of what would normally be measured as overconfidence. Our paper also contributes to a refined understanding of control.

Suggested Citation

  • Benoît, Jean-Pierre & Dubra, Juan & Romagnoli, Giorgia, 2019. "Belief elicitation when more than money matters," MPRA Paper 95550, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:95550
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Elicitation; Overconfidence; Control. Experimental Methods;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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