Are markets more accurate than polls? The surprising informational value of “just asking”
Journal Title: Judgment and Decision Making - Year 2019, Vol 14, Issue 2
Abstract
Psychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having yielded more accurate probability estimates than opinion polls or experts for a wide variety of events, all without ever asking for self-reported beliefs. We conduct the most direct comparison to date of prediction markets to simple self-reports using a within-subject design. Our participants traded on the likelihood of geopolitical events. Each time they placed a trade, they first had to report their belief that the event would occur on a 0–100 scale. When previously validated aggregation algorithms were applied to self-reported beliefs, they were at least as accurate as prediction-market prices in predicting a wide range of geopolitical events. Furthermore, the combination of approaches was significantly more accurate than prediction-market prices alone, indicating that self-reports contained information that the market did not efficiently aggregate. Combining measurement techniques across behavioral and social sciences may have greater benefits than previously thought.
Authors and Affiliations
Jason Dana, Pavel Atanasov, Philip Tetlock and Barbara Mellers
Keywords
Related Articles
- EP ID EP678405
- DOI -
- Views 132
- Downloads 0
Trolley problems in context
Would you redirect a trolley to save five people even if it means that the trolley will run over a person on the side track? Most people say they would. Would you push that same person into the path of the trolley in ord...
Why do we overestimate others’ willingness to pay?
People typically overestimate how much others are prepared to pay for consumer goods and services. We investigated the extent to which latent beliefs about others’ affluence contribute to this overestimation. In Studies...
Is that the answer you had in mind? The effect of perspective on unethical behavior
We explored how the perspective through which individuals view their actions influences their ethicality, comparing a narrow perspective that allows for evaluation of each choice in isolation, to a broad perspective that...
It’s not right but it’s permitted: Wording effects in moral judgement
This study aims to provide evidence about two widely held assumptions in the experimental study of moral judgment. First, that different terms used to ask for moral judgment (e.g., blame, wrongness, permissibility…) can...
Asymmetric dominance and the stability of constructed preferences
In this research, we explore how experience with an "attraction set" of options, designed to elicit an asymmetric-dominance (attraction) effect, affects choice making in a second "compromise set" designed to elicit a com...