Simple bets to elicit private signals

Aurélien Baillon*, Yan Xu

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)
6 Downloads (Pure)

Abstract

This paper introduces two simple betting mechanisms—top-flop and threshold betting—to elicit unverifiable information from crowds. Agents are offered bets on the rating of an item about which they received a private signal versus that of a random item. We characterize conditions for the chosen bet to reveal the agents' private signal even if the underlying ratings are biased. We further provide microeconomic foundations of the ratings, which are endogenously determined by the actions of other agents in a game setting. Our mechanisms relax standard assumptions of the literature, such as common prior, and homogeneous and risk neutral agents.

Original languageEnglish
Pages (from-to)777-797
Number of pages21
JournalTheoretical Economics
Volume16
Issue number3
DOIs
Publication statusPublished - Jul 2021

Bibliographical note

JEL classification: D8, C9
Publisher Copyright:
Copyright © 2021 The Authors.

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