Screening of Informed and Uninformed Experts

12/12/2019

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by   Jorge Barreras, et al.

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Testing the validity of claims made by self-proclaimed experts can be impossible when testing them in isolation, even with infinite observations at the disposal of the tester. However, in a multiple expert setting it is possible to design a contract that only informed experts accept and uninformed experts reject. The tester can pit competing forecasts of future events against each other and take advantage of the uncertainty experts have about the other experts' knowledge. This contract will work even when there is only a single data point to evaluate.