The design of improved parimutuel-type information aggregation mechanisms: Inaccuracies and the long-shot bias as disequilibrium phenomena

Journal of Economic Behavior and Organization

Volumn 69, Issue 2, 2009, Pages 170-181

  Axelrod, Boris S ^a   Kulick, Ben J ^a   Plott, Charles R ^a   Roust, Kevin A ^a  

^a CALIFORNIA INSTITUTE OF TECHNOLOGY   (United States)

Author keywords

Forecasting; Information aggregation; Parimutuel

Indexed keywords

EID: 58649097722     PISSN: 01672681     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jebo.2007.09.010     Document Type: Article

References (15)

1. Allais M. Le comportement de l'homme rationnel devant le risque: critique des postulats et axiomes de l'ecole Americaine. Econometrica 21 (1953) 503-546
2. Camerer C. Individual decision making. In: Kagel J., and Roth A. (Eds). The Handbook of Experimental Economics (1995), Princeton University Press, Princeton, NJ 587-703
3. Camerer C. Can asset markets be manipulated? A field experiment with racetrack betting. Journal of Political Economy 106 (1998) 457-482
4. Chen, K.Y., Plott, C.R., 2002. Information aggregation mechanisms: concept, design and implementation for a sales forecasting problem. Social Science Working Paper 1131, California Institute of Technology.
5. Edwards W. In: Kleinmuntz B. (Ed). Conservatism in Human Information Processing; Formal Representation of Human Judgment (1968), Wiley pp. 17-52
6. Kahneman D., and Tversky A. Prospect theory: an analysis of decision under risk. Econometrica 47 (1979) 263-292
7. Plott C.R. Markets as information gathering tools. Southern Economic Journal 67 (2000) 1-15
8. Plott C.R., and Sunder S. Efficiency of experimental security markets with insider information: an application of rational expectations models. Journal of Political Economy 90 (1982) 663-698
9. Plott C.R., and Sunder S. Rational expectations and the aggregation of diverse information in laboratory security markets. Econometrica 56 (1988) 1085-1118
10. Plott C.R., Wit J., and Yang W. Parimutuel betting markets as information aggregation devices: experimental results. Economic Theory 22 (2003) 311-351
11. Quiggin J. A theory of anticipated utility. Journal of Economic Behavior and Organization 3 (1982) 323-343
12. Ross S. Introduction to Probability and Statistics for Engineers and Scientists (1987), Elsevier Academic Press, Burlington, MA
13. Ross S. A First Course in Probability (2002), Prentice-Hall
14. Thaler R., and Ziemba W. Anomalies: parimutuel betting markets: racetracks and lotteries. Journal of Economic Perspectives 2 (1988) 161-174
15. Tversky A., and Kahneman D. Judgment under uncertainty: Heuristics and biases. Science 185 (1974 (September)) 1124-1131