Subjective probabilities and scoring rules: experimental evidence

• Published in: American journal of agricultural economics Vol. 71; no. 2; pp. 363 - 369
• Main Authors: Nelson, R.G. (Sam Houston State University), Bessler, D.A
• Format: Journal Article
• Language: English
• Published: Menasha, Wis Oxford University Press 01.05.1989; American Agricultural Economics Association; Blackwell; American Farm Economic Association
• Subjects: Agricultural economics; agricultural research; ANALISIS ESTADISTICO; ANALYSE STATISTIQUE; analysis of variance; computer software; CONCIENCIA SOCIAL; CONSCIENCE SOCIALE; Crop economics; Crops; decision making; Dominant strategy; Earnings forecasting; Economic expectations; empirical models; Entscheidung; EVALUACION; EVALUATION; game theory; INVESTIGACION; linear programming; linear rule; linear utility; LOGICIEL; mathematical models; mathematical theory; POLITICA MONETARIA; POLITIQUE MONETAIRE; prediction; PREVISION; PRISE DE DECISION; Probabilities; probability; probability analysis; Probability forecasts; PROGRAMACION; PROGRAMAS DE ORDENADOR; PROGRAMMATION; PRONOSTICO; proper rule; quadratic rule; RECHERCHE; subjective probability assessment; Theorie; Time series forecasting; TOMA DE DECISIONES; Utility functions; validity; wages and remuneration; Wahrscheinlichkeitsrechnung
• ISSN: 0002-9092; 1467-8276
• DOI: 10.2307/1241594

This paper provides an articulation of the theory of scoring rules that leads to a testable hypothesis about strategic behavior under an improper rule. Subjects in a laboratory setting were first screened for linear utility in the range of rewards. Those that passed this test were used as subjects in a probability forecasting experiment. Results suggest that theory holds when subjects forecast over many periods, although inexperienced subjects may fail to exploit the dominant strategy in the initial periods.