Do Monetary Incentives and Chained Questions Affect the Validity of Risk Estimates Elicited via the Exchangeability Method? An Experimental Investigation

Abstract

Using a laboratory experiment, we investigate the validity of stated risks elicited via the Exchangeability Method (EM) by defining a valuation method based on de Finetti’s notion of coherence. The reliability of risk estimates elicited through the EM has been theoretically questioned because the chained structure of the game, in which each question depends on the respondent’s answer to the previous one, is thought to potentially undermine the incentive compatibility of the elicitation mechanism even when real monetary incentives are provided. Our results suggest that superiority of real monetary incentives is not evident when people are presented with chained experimental designlab experiment, risk elicitation, exchangeability, validity, pesticide residue