Eliciting Private Information with Noise: The Case of Randomized Response

54 Pages Posted: 15 Nov 2013

See all articles by Andreas Blume

Andreas Blume

University of Pittsburgh - Department of Economics

Ernest Lai

Lehigh University - Department of Economics

Wooyoung Lim

Hong Kong University of Science & Technology (HKUST) - Department of Economics

Date Written: July 23, 2013

Abstract

The paper formalizes Warner’s (1965) randomized response technique (RRT) as a game and implements it experimentally, thus linking game theoretic approaches to randomness in communication with survey practice in the field and a novel implementation in the lab. As predicted by our model and in line with Warner, the frequency of truthful responses is significantly higher with randomization than without. The model predicts that randomization weakly improves information elicitation, as measured in terms of mutual information, although, surprisingly, not always by RRT inducing truth-telling. Contrary to this prediction, randomization significantly reduces the elicited information in our experiment.

Keywords: Randomized Response, Lying Aversion, Stigmatization Aversion, Mutual Information, Laboratory Experiments

JEL Classification: C72, C92, D82, D83

Suggested Citation

Blume, Andreas and Lai, Ernest and Lim, Wooyoung, Eliciting Private Information with Noise: The Case of Randomized Response (July 23, 2013). Institute of Mathematical Economics Working Paper No. 490, Available at SSRN: https://ssrn.com/abstract=2354598 or http://dx.doi.org/10.2139/ssrn.2354598

Andreas Blume (Contact Author)

University of Pittsburgh - Department of Economics ( email )

4901 Wesley Posvar Hall
230 South Bouquet Street
Pittsburgh, PA 15260
United States

Ernest Lai

Lehigh University - Department of Economics ( email )

620 Taylor Street
Bethlehem, PA 18015
United States

Wooyoung Lim

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China

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