Are markets more accurate than polls? The surprising informational value of “just asking”
Psychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having yielded more accurate probability estimates than opinion polls or experts for a...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Cambridge University Press
2019-03-01
|
| Series: | Judgment and Decision Making |
| Subjects: | |
| Online Access: | https://www.cambridge.org/core/product/identifier/S1930297500003375/type/journal_article |
| _version_ | 1797696012442140672 |
|---|---|
| author | Jason Dana Pavel Atanasov Philip Tetlock Barbara Mellers |
| author_facet | Jason Dana Pavel Atanasov Philip Tetlock Barbara Mellers |
| author_sort | Jason Dana |
| collection | DOAJ |
| description | Psychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having yielded more accurate probability estimates than opinion polls or experts for a wide variety of events, all without ever asking for self-reported beliefs. We conduct the most direct comparison to date of prediction markets to simple self-reports using a within-subject design. Our participants traded on the likelihood of geopolitical events. Each time they placed a trade, they first had to report their belief that the event would occur on a 0–100 scale. When previously validated aggregation algorithms were applied to self-reported beliefs, they were at least as accurate as prediction-market prices in predicting a wide range of geopolitical events. Furthermore, the combination of approaches was significantly more accurate than prediction-market prices alone, indicating that self-reports contained information that the market did not efficiently aggregate. Combining measurement techniques across behavioral and social sciences may have greater benefits than previously thought. |
| first_indexed | 2024-03-12T03:20:26Z |
| format | Article |
| id | doaj.art-bbd86b17b29a42afa329931d26ddb0f6 |
| institution | Directory Open Access Journal |
| issn | 1930-2975 |
| language | English |
| last_indexed | 2024-03-12T03:20:26Z |
| publishDate | 2019-03-01 |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Judgment and Decision Making |
| spelling | doaj.art-bbd86b17b29a42afa329931d26ddb0f62023-09-03T14:02:44ZengCambridge University PressJudgment and Decision Making1930-29752019-03-011413514710.1017/S1930297500003375Are markets more accurate than polls? The surprising informational value of “just asking”Jason Dana0Pavel Atanasov1Philip Tetlock2Barbara Mellers3Yale University.Department of Psychology, University of PennsylvaniaDepartment of Psychology, University of PennsylvaniaDepartment of Psychology, University of PennsylvaniaPsychologists typically measure beliefs and preferences using self-reports, whereas economists are much more likely to infer them from behavior. Prediction markets appear to be a victory for the economic approach, having yielded more accurate probability estimates than opinion polls or experts for a wide variety of events, all without ever asking for self-reported beliefs. We conduct the most direct comparison to date of prediction markets to simple self-reports using a within-subject design. Our participants traded on the likelihood of geopolitical events. Each time they placed a trade, they first had to report their belief that the event would occur on a 0–100 scale. When previously validated aggregation algorithms were applied to self-reported beliefs, they were at least as accurate as prediction-market prices in predicting a wide range of geopolitical events. Furthermore, the combination of approaches was significantly more accurate than prediction-market prices alone, indicating that self-reports contained information that the market did not efficiently aggregate. Combining measurement techniques across behavioral and social sciences may have greater benefits than previously thought.https://www.cambridge.org/core/product/identifier/S1930297500003375/type/journal_articlepredictionforecastjudgmentprediction marketsself-reportssurveys |
| spellingShingle | Jason Dana Pavel Atanasov Philip Tetlock Barbara Mellers Are markets more accurate than polls? The surprising informational value of “just asking” Judgment and Decision Making prediction forecast judgment prediction markets self-reports surveys |
| title | Are markets more accurate than polls? The surprising informational value of “just asking” |
| title_full | Are markets more accurate than polls? The surprising informational value of “just asking” |
| title_fullStr | Are markets more accurate than polls? The surprising informational value of “just asking” |
| title_full_unstemmed | Are markets more accurate than polls? The surprising informational value of “just asking” |
| title_short | Are markets more accurate than polls? The surprising informational value of “just asking” |
| title_sort | are markets more accurate than polls the surprising informational value of just asking |
| topic | prediction forecast judgment prediction markets self-reports surveys |
| url | https://www.cambridge.org/core/product/identifier/S1930297500003375/type/journal_article |
| work_keys_str_mv | AT jasondana aremarketsmoreaccuratethanpollsthesurprisinginformationalvalueofjustasking AT pavelatanasov aremarketsmoreaccuratethanpollsthesurprisinginformationalvalueofjustasking AT philiptetlock aremarketsmoreaccuratethanpollsthesurprisinginformationalvalueofjustasking AT barbaramellers aremarketsmoreaccuratethanpollsthesurprisinginformationalvalueofjustasking |