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Incentives in experiments with objective lotteries

Published online by Cambridge University Press:  14 March 2025

Yaron Azrieli ,
Christopher P. Chambers  and
Paul J. Healy
Yaron Azrieli*
Affiliation:
Department of Economics, The Ohio State University, Columbus, USA
Christopher P. Chambers*
Affiliation:
Department of Economics, Georgetown University, Washington, USA
Paul J. Healy*
Affiliation:
Department of Economics, The Ohio State University, Columbus, USA
*
azrieli.2@osu.edu
cc1950@georgetown.edu
healy.52@osu.edu
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Abstract

Azrieli et al. (J Polit Econ, 2018) provide a characterization of incentive compatible payment mechanisms for experiments, assuming subjects’ preferences respect dominance but can have any possible subjective beliefs over random outcomes. If instead we assume subjects view probabilities as objective—for example, when dice or coins are used—then the set of incentive compatible mechanisms may grow. In this paper we show that it does, but the added mechanisms are not widely applicable. As in the subjective-beliefs framework, the only broadly-applicable incentive compatible mechanism (assuming all preferences that respect dominance are admissible) is to pay subjects for one randomly-selected decision.

Keywords

Experimental designDecision theoryMechanism design

JEL classification

D84: Expectations • Speculations C90: General D81: Criteria for Decision-Making under Risk and Uncertainty
Type
Original Paper
Information
Experimental Economics , Volume 23 , Issue 1 , March 2020 , pp. 1 - 29
Copyright
Copyright © 2019 Economic Science Association

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