Experimental Economics

, Volume 13, Issue 4, pp 412–438 | Cite as

Belief elicitation in experiments: is there a hedging problem?

  • Mariana Blanco
  • Dirk EngelmannEmail author
  • Alexander K. Koch
  • Hans-Theo Normann


Belief-elicitation experiments usually reward accuracy of stated beliefs in addition to payments for other decisions. But this allows risk-averse subjects to hedge with their stated beliefs against adverse outcomes of the other decisions. So can we trust the existing belief-elicitation results? And can we avoid potential hedging confounds? We propose an experimental design that theoretically eliminates hedging opportunities. Using this design, we test for the empirical relevance of hedging effects in the lab. Our results suggest that hedging confounds are not a major problem unless hedging opportunities are very prominent. If hedging opportunities are transparent, and incentives to hedge are strong, many subjects do spot hedging opportunities and respond to them. The bias can go beyond players actually hedging themselves, because some expect others to hedge and best respond to this.


Belief elicitation Hedging Experimental economics Experimental methodology 

JEL Classification

C72 C90 


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Supplementary material

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Copyright information

© Economic Science Association 2010

Authors and Affiliations

  • Mariana Blanco
    • 1
  • Dirk Engelmann
    • 2
    • 3
    • 4
    Email author
  • Alexander K. Koch
    • 5
  • Hans-Theo Normann
    • 6
    • 7
  1. 1.Economics DepartmentUniversidad del RosarioBogotáColombia
  2. 2.Department of EconomicsUniversity of MannheimMannheimGermany
  3. 3.Centre for Experimental EconomicsUniversity of CopenhagenCopenhagenDenmark
  4. 4.Economics Institute of the Academy of Sciences of the Czech RepublicPragueCzech Republic
  5. 5.School of Economics and ManagementAarhus UniversityAarhus CDenmark
  6. 6.Düsseldorf Institute for Competition Economics (DICE)Düsseldorf UniversityDüsseldorfGermany
  7. 7.Max-Planck Institute for Research on Collective GoodsBonnGermany

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