Aurélien Baillon

General seminars
amse seminar

Aurélien Baillon

EM Lyon
Peer prediction markets to elicit unverifiable information
Joint with
Cem Peker, Sophie van der Zee
Venue

IBD Amphi

Îlot Bernard du Bois - Amphithéâtre

AMU - AMSE
5-9 boulevard Maurice Bourdet
13001 Marseille

Date(s)
Monday, June 12 2023| 11:30am to 12:45pm
Contact(s)

Ewen Gallic: ewen.gallic[at]univ-amu.fr
Avner Seror: avner.seror[at]univ-amu.fr

Abstract

We introduce an incentive mechanism to elicit answers to binary questions that cannot be verified for accuracy. Agents choose whether to receive a costly private signal, which leads them to endorse ``yes'' or ``no'' as an answer. Then, they either buy or sell an asset, whose value is determined by the endorsement rate of ``yes'' answers. We obtain a separating equilibrium, where agents want signals and trade the asset as a function of their signal. Two experimental studies test the theoretical results. The first shows that the mechanism motivates costly information acquisition. The second demonstrates feasibility in a natural setting.

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