@article{f07a3c22e52147aeb8d7d7acb286ad94,
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.",
author = "Mariana Blanco and Dirk Engelmann and Koch, \{Alexander K.\} and Normann, \{Hans Theo\}",
note = "Funding Information: Acknowledgements Financial support from the Nuffield Foundation, grant No. SGS/34070, is gratefully acknowledged. We thank two anonymous referees, Tim Cason, Glenn Harrison, Burkhard Schipper, 29Armantier and Treich (2009) and Fehr et al. (2008) go even further and pay subjects for their belief statement based on how accurately it reflects the choice by a player other than the one they are matched with for the game. While this further reduces the correlation between game payoffs and guess payoffs, it still does not eliminate theoretical hedging opportunities as discussed in Sect. 2. Funding Information: Karl Schlag and Nicholas Treich for helpful comments and suggestions. We thank the Centre for Experimental Economics (CEE) at the University of Copenhagen for giving us access to the experimental laboratory (LEE) for some of our sessions. In particular we are grateful to Jean-Robert Tyran and Marco Piovesan for their help and support and to Pablo Torija for excellent assistance. Dirk Engelmann acknowledges financial support from the institutional research grant AV0Z70850503 of the Economics Institute of the Academy of Sciences of the Czech Republic, v.v.i. Mariana Blanco thanks the Overseas Research Student Awards Scheme for financial support. Substantial parts of this research were conducted while all authors were at Royal Holloway, University of London.",
year = "2010",
month = dec,
doi = "10.1007/s10683-010-9249-1",
language = "English (US)",
volume = "13",
pages = "412--438",
journal = "Experimental Economics",
issn = "1386-4157",
publisher = "Cambridge University Press",
number = "4",
}