A penny for your thoughts: a survey of methods for eliciting beliefs

Abstract

Incentivized methods for eliciting subjective probabilities in economic experiments present the subject with risky choices that encourage truthful reporting. We discuss the most prominent elicitation methods and their underlying assumptions, provide theoretical comparisons and give a new justification for the quadratic scoring rule. On the empirical side, we survey the performance of these elicitation methods in actual experiments, considering also practical issues of implementation such as order effects, hedging, and different ways of presenting probabilities and payment schemes to experimental subjects. We end with a discussion of the trade-offs involved in using incentives for belief elicitation and some guidelines for implementation.