Applying quadratic scoring rule transparently in multiple choice setting: a note

Abstract

The quadratic scoring rule (QSR) is often used to guarantee an incentive compatible elicitation of subjective probabilities over events. Experimentalists have regularly not been able to ensure that subjects fully comprehend the consequences of their actions on payoffs given the rules of the games. In this note, we present a procedure that allows the transparent use of the QSR even in multiple-choice scenarios. For that purpose, two methodological means are applied: an alternative representation of the score and a short learning period to familiarize subjects with the payoff mechanism. The results suggest that both means were necessary and successful in facilitating subjects’ understanding of the rule.