Elicitation of Subjective Probabilities by Sequential Choices

Abstract

Abstract The subjective probability of an uncertain outcome can be elicited by offering the subject a sequence of choices of prospects. At any step Prospect A is a reward of g(r) if the outcome in question occurs, while Prospect B is a reward of g(r) if br occurs, where br has known probability r. For a particular sequence of r-values a characterization is given of rewards which encourage honest responses. The results are related to the method of scoring rules for eliciting subjective probabilities.