Published March 2007
| Submitted
Working Paper
Open
Design Improved Parimutuel-type Information Aggregation Mechanisms: Inaccuracies and the Long-Shot Bias as Disequilibrium Phenomena
Chicago
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Abstract
Information Aggregation Mechanisms (IAMs) based on parimutuel-type betting systems can aggregate information from complex environments. However, the performance of previously studied systems leaves something to be desired due to possible bluffing, strategic timing of decisions and a so called long shot bias. This paper demonstrates that two modifications of parimutuel systems improve information aggregation performance by removing disinformation due to strategic behavior and by removing misleading disequilibrium behavior. The experiments also demonstrate that the so called long shot bias results from disequilibrium behavior as opposed to having roots in the psychology of the individuals.
Additional Information
The financial support of the National Science Foundation is gratefully acknowledged. The comments of David Grether, Colin Camerer, and Robert Sherman have been very helpful. Published as Axelrod, B.S., Kulick, B.J., Plott, C.R., & Roust, K.A. (2009). The design of improved parimutuel-type information aggregation mechanisms: Inaccuracies and the long-shot bias as disequilibrium phenomena. Journal of Economic Behavior & Organization, 69(2), 170-181.Attached Files
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Additional details
- Eprint ID
- 79572
- Resolver ID
- CaltechAUTHORS:20170728-164034910
- NSF
- Created
-
2017-08-01Created from EPrint's datestamp field
- Updated
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2023-10-26Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1268