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Journal of Risk and Uncertainty

, Volume 30, Issue 2, pp 169–188 | Cite as

An Experimental Comparison of Induced and Elicited Beliefs

  • Terrance M. Hurley
  • Jason F. Shogren
Article

Abstract

Understanding choice under risk requires knowledge of beliefs and preferences. A variety of methods have been proposed to elicit peoples’ beliefs. The efficacy of alternative methods, however, has not been rigorously documented. Herein we use an experiment to test whether an induced probability can be recovered using an elicitation mechanism based on peoples’ predictions about a random event. We are unable to recover the induced belief. Instead, the estimated belief is systematically biased in a way that is consistent with anecdotal evidence in the economics, psychology, and statistics literature: people seem to overestimate low and underestimate high probabilities.

Keywords

beliefs elicit induce probability risk 

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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Department of Applied EconomicsUniversity of MinnesotaSt. Paul

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