Abstract
The literature on proper scoring rules has mostly studied the case of risk neutral agents. We analytically investigate how risk averse, expected utility maximizing forecasters behave when presented with risk neutral proper scoring rules. If the state variable is binary, risk averse agents shade their reports toward saying that the states are equally likely. In the non-binary case reported probabilities are compressed relative to truthtelling. We show the implications of our results for the use of elicited probabilities as inputs to decision-making and nd that naive elicitors may violate rst-order stochastic dominance. Possible resolutions of these problems are presented, including an estimator for the mean population belief when the distribution of risk attitudes is known. Finally, we discuss the relevance of our results to recent work in experimental economics.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
