### Abstract

Language | English |
---|---|

Place of Publication | Atlanta, GA |

Publisher | CEAR, Georgia State University |

Number of pages | 50 |

State | Published - 2012 |

Series | Working paper / Center for Economic Analysis of Risk (CEAR) |
---|---|

Number | 2012-09 |

### Keywords

- Subjective Probability Elicitation
- Binary Lottery Procedure
- Experimental Economies
- Risk Neutrality

### Cite this

*Eliciting Subjective Probabilities with Binary Lotteries*. Atlanta, GA: CEAR, Georgia State University. Working paper / Center for Economic Analysis of Risk (CEAR), No. 2012-09

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**Eliciting Subjective Probabilities with Binary Lotteries.** / Harrison, Glenn W.; Martínez-Correa, Jimmy; Swarthout, J. Todd.

Research output: Working paper › Research

TY - UNPB

T1 - Eliciting Subjective Probabilities with Binary Lotteries

AU - Harrison,Glenn W.

AU - Martínez-Correa,Jimmy

AU - Swarthout,J. Todd

PY - 2012

Y1 - 2012

N2 - We evaluate the binary lottery procedure for inducing risk neutral behavior in a subjective belief elicitation task. Harrison, Martínez-Correa and Swarthout [2013] found that the binary lottery procedure works robustly to induce risk neutrality when subjects are given one risk task defined over objective probabilities. Drawing a sample from the same subject population, we find evidence that the binary lottery procedure induces linear utility in a subjective probability elicitation task using the Quadratic Scoring Rule. We also show that the binary lottery procedure can induce direct revelation of subjective probabilities in subjects with certain Non-Expected Utility preference representations that satisfy weak conditions that we identify.

AB - We evaluate the binary lottery procedure for inducing risk neutral behavior in a subjective belief elicitation task. Harrison, Martínez-Correa and Swarthout [2013] found that the binary lottery procedure works robustly to induce risk neutrality when subjects are given one risk task defined over objective probabilities. Drawing a sample from the same subject population, we find evidence that the binary lottery procedure induces linear utility in a subjective probability elicitation task using the Quadratic Scoring Rule. We also show that the binary lottery procedure can induce direct revelation of subjective probabilities in subjects with certain Non-Expected Utility preference representations that satisfy weak conditions that we identify.

KW - Subjective Probability Elicitation

KW - Binary Lottery Procedure

KW - Experimental Economies

KW - Risk Neutrality

KW - Subjective Probability Elicitation

KW - Binary Lottery Procedure

KW - Experimental Economies

KW - Risk Neutrality

M3 - Working paper

BT - Eliciting Subjective Probabilities with Binary Lotteries

PB - CEAR, Georgia State University

CY - Atlanta, GA

ER -