Evaluating Strategic Forecasters

50 Pages Posted: 18 Apr 2017 Last revised: 8 May 2019

See all articles by Rahul Deb

Rahul Deb

University of Toronto

Mallesh Pai

Rice University - Department of Economics

Maher Said

NYU Stern School of Business

Date Written: March 29, 2018


Motivated by the question of how one should evaluate professional election forecasters, we study a novel dynamic mechanism design problem without transfers. A principal who wishes to hire only high-quality forecasters is faced with an agent of unknown quality. The agent privately observes signals about a publicly observable future event, and may strategically misrepresent information to inflate the principal’s perception of his quality. We show that the optimal deterministic mechanism is simple and easy to implement in practice: it evaluates a single, optimally timed prediction. We study the generality of this result and its robustness to randomization and noncommitment.

Keywords: Dynamic Mechanism Design, Mechanism Design without Transfers, Forecasting, Learning, Election Predictions

JEL Classification: D82, D83, D86

Suggested Citation

Deb, Rahul and Pai, Mallesh and Said, Maher, Evaluating Strategic Forecasters (March 29, 2018). American Economic Review, 108(10), 3057-3103 (2018), Available at SSRN: https://ssrn.com/abstract=2953963 or http://dx.doi.org/10.2139/ssrn.2953963

Rahul Deb

University of Toronto ( email )

Toronto, Ontario M5S 3G8

HOME PAGE: http://www.economics.utoronto.ca/debrahul/

Mallesh Pai

Rice University - Department of Economics ( email )

6100 South Main Street
Houston, TX 77005
United States

Maher Said (Contact Author)

NYU Stern School of Business ( email )

44 West 4th Street
New York, NY 10012
United States

HOME PAGE: http://www.mahersaid.com/

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