Publication: An axiomatic characterization of wagering mechanisms
Open/View Files
Date
2015
Published Version
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier BV
The Harvard community has made this article openly available. Please share how this access benefits you.
Citation
Lambert, Nicolas S., John Langford, Jennifer Wortman Vaughan, Yiling Chen, Daniel M. Reeves, Yoav Shoham, and David M. Pennock. 2015. “An Axiomatic Characterization of Wagering Mechanisms.” Journal of Economic Theory 156 (March): 389–416. doi:10.1016/j.jet.2014.03.012.
Research Data
Abstract
We construct a budget-balanced wagering mechanism that flexibly extracts information about event probabilities, as well as the mean, median, and other statistics from a group of individuals whose beliefs are immutable to the actions of others. We show how our mechanism, called the Brier betting mechanism, arises naturally from a modified parimutuel betting market. We prove that it is essentially the unique wagering mechanism that is anonymous, proportional, sybilproof, and homogeneous. While the Brier betting mechanism is designed for individuals with immutable beliefs, we find that it continues to perform well even for Bayesian individuals who learn from the actions of others.
Description
Other Available Sources
Keywords
Betting market, Wagering mechanism, Parimutuel betting, Scoring rule, Belief elicitation, Prediction market
Terms of Use
This article is made available under the terms and conditions applicable to Open Access Policy Articles (OAP), as set forth at Terms of Service