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An axiomatic characterization of wagering mechanisms

Listed author(s):
  • Lambert, Nicolas S.
  • Langford, John
  • Wortman Vaughan, Jennifer
  • Chen, Yiling
  • Reeves, Daniel M.
  • Shoham, Yoav
  • Pennock, David M.
Registered author(s):

    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0022053114000520
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    Article provided by Elsevier in its journal Journal of Economic Theory.

    Volume (Year): 156 (2015)
    Issue (Month): C ()
    Pages: 389-416

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    Handle: RePEc:eee:jetheo:v:156:y:2015:i:c:p:389-416
    DOI: 10.1016/j.jet.2014.03.012
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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