Forthcoming publication in Theoretical Economics

"Simple bets to elicit private signals" by Aurelien Baillon and Yan Xu has been accepted for publication in Theoretical Economics

The paper can be found here: [ / article / viewForthcomingFile / 4343/28496/1 ]

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 micro-economic 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.

Yan XU