Department of Economics and Business Economics

Belief elicitation in experiments: Is there a hedging problem?

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Standard

Belief elicitation in experiments: Is there a hedging problem? / Blanco, Mariana; Engelmann, Dirk; Koch, Alexander; Normann, Hans-Theo.

In: Experimental Economics, Vol. 13, No. 4, 2010, p. 412–438.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

Harvard

Blanco, M, Engelmann, D, Koch, A & Normann, H-T 2010, 'Belief elicitation in experiments: Is there a hedging problem?', Experimental Economics, vol. 13, no. 4, pp. 412–438. https://doi.org/10.1007/s10683-010-9249-1

APA

Blanco, M., Engelmann, D., Koch, A., & Normann, H-T. (2010). Belief elicitation in experiments: Is there a hedging problem? Experimental Economics, 13(4), 412–438. https://doi.org/10.1007/s10683-010-9249-1

CBE

Blanco M, Engelmann D, Koch A, Normann H-T. 2010. Belief elicitation in experiments: Is there a hedging problem?. Experimental Economics. 13(4):412–438. https://doi.org/10.1007/s10683-010-9249-1

MLA

Blanco, Mariana et al. "Belief elicitation in experiments: Is there a hedging problem?". Experimental Economics. 2010, 13(4). 412–438. https://doi.org/10.1007/s10683-010-9249-1

Vancouver

Blanco M, Engelmann D, Koch A, Normann H-T. Belief elicitation in experiments: Is there a hedging problem? Experimental Economics. 2010;13(4):412–438. https://doi.org/10.1007/s10683-010-9249-1

Author

Blanco, Mariana ; Engelmann, Dirk ; Koch, Alexander ; Normann, Hans-Theo. / Belief elicitation in experiments: Is there a hedging problem?. In: Experimental Economics. 2010 ; Vol. 13, No. 4. pp. 412–438.

Bibtex

@article{e36c12a0880c11df8c1a000ea68e967b,
title = "Belief elicitation in experiments: Is there a hedging problem?",
abstract = "Belief-elicitation experiments usually reward accuracy of stated beliefs in addition to payments for other decisions. But this allows risk-averse subjects to hedge with their stated beliefs against adverse outcomes of the other decisions. So can we trust the existing belief-elicitation results? And can we avoid potential hedging confounds? We propose an experimental design that theoretically eliminates hedging opportunities. Using this design, we test for the empirical relevance of hedging effects in the lab. Our results suggest that hedging confounds are not a major problem unless hedging opportunities are very prominent. If hedging opportunities are transparent, and incentives to hedge are strong, many subjects do spot hedging opportunities and respond to them. The bias can go beyond players actually hedging themselves, because some expect others to hedge and best respond to this. ",
keywords = "Belief Elicitation, Hedging, Experimental economics, Experimental methodology",
author = "Mariana Blanco and Dirk Engelmann and Alexander Koch and Hans-Theo Normann",
year = "2010",
doi = "10.1007/s10683-010-9249-1",
language = "English",
volume = "13",
pages = "412–438",
journal = "Experimental Economics",
issn = "1386-4157",
publisher = "Springer New York LLC",
number = "4",

}

RIS

TY - JOUR

T1 - Belief elicitation in experiments: Is there a hedging problem?

AU - Blanco, Mariana

AU - Engelmann, Dirk

AU - Koch, Alexander

AU - Normann, Hans-Theo

PY - 2010

Y1 - 2010

N2 - Belief-elicitation experiments usually reward accuracy of stated beliefs in addition to payments for other decisions. But this allows risk-averse subjects to hedge with their stated beliefs against adverse outcomes of the other decisions. So can we trust the existing belief-elicitation results? And can we avoid potential hedging confounds? We propose an experimental design that theoretically eliminates hedging opportunities. Using this design, we test for the empirical relevance of hedging effects in the lab. Our results suggest that hedging confounds are not a major problem unless hedging opportunities are very prominent. If hedging opportunities are transparent, and incentives to hedge are strong, many subjects do spot hedging opportunities and respond to them. The bias can go beyond players actually hedging themselves, because some expect others to hedge and best respond to this.

AB - Belief-elicitation experiments usually reward accuracy of stated beliefs in addition to payments for other decisions. But this allows risk-averse subjects to hedge with their stated beliefs against adverse outcomes of the other decisions. So can we trust the existing belief-elicitation results? And can we avoid potential hedging confounds? We propose an experimental design that theoretically eliminates hedging opportunities. Using this design, we test for the empirical relevance of hedging effects in the lab. Our results suggest that hedging confounds are not a major problem unless hedging opportunities are very prominent. If hedging opportunities are transparent, and incentives to hedge are strong, many subjects do spot hedging opportunities and respond to them. The bias can go beyond players actually hedging themselves, because some expect others to hedge and best respond to this.

KW - Belief Elicitation

KW - Hedging

KW - Experimental economics

KW - Experimental methodology

U2 - 10.1007/s10683-010-9249-1

DO - 10.1007/s10683-010-9249-1

M3 - Journal article

VL - 13

SP - 412

EP - 438

JO - Experimental Economics

JF - Experimental Economics

SN - 1386-4157

IS - 4

ER -