TITLE:
Screening Agents in Belief Eliciting Mechanisms
AUTHORS:
Vinaysingh Chawan
KEYWORDS:
Subjective Probability, Probability Elicitation, Scoring Rules, Screening
JOURNAL NAME:
Theoretical Economics Letters,
Vol.6 No.4,
August
22,
2016
ABSTRACT: This paper considers
the problem of a decision maker (DM), who needs to hire an agent to assess the
probability of occurrence of an event that is of interest to her. To decide the
agent’s reward, the DM proposes a mechanism that will give reward based on the
agent’s reported subjective probability and the actual outcome of the event.
The reward mechanism needs to incentivize the expert to honestly reveal his
subjective probability, and the reward has to be non-negative in all cases in
order to ensure agent’s participation. In such a situation, it is possible that
there are some agents who lack the expertise to assess the situation, but still
participate to get sure non-negative payoff. The DM wants to screen out such
uninformed agents from the informed ones. This work considers two mechanisms,
and analyzes the behavior of both types of agents for the two mechanisms. It
shows that screening is possible along with belief elicitation in some cases.