Forecast Dispersion in Finite-Player Forecasting Games

The B.E. Journal of Theoretical Economics, Forthcoming

12 Pages Posted: 15 Oct 2014 Last revised: 29 Oct 2017

See all articles by Jin Yeub Kim

Jin Yeub Kim

Yonsei University - School of Economics

Myungkyu Shim

Yonsei University - School of Economics

Date Written: October 25, 2017

Abstract

We study forecast dispersion in a finite-player forecasting game modeled as an aggregate game with payoff externalities and dispersed information. In the game, each agent cares about being accurate as well as about the distance of his forecast from the average forecast; and with a finite number of agents, the agents can strategically in influence that average. We show that the finiteness of the number of agents weakens the strategic effect induced by the underlying preference. We find that when each agent prefers to be close to the average forecast, the presence of strategic manipulation of the average forecast contributes to a higher forecast dispersion; when instead each agent wants to be distinctive from the average, the opposite is true.

Keywords: forecast dispersion, finite-player, aggregate games, coordination, incomplete information

JEL Classification: C72, D82, D83, E37

Suggested Citation

Kim, Jin Yeub and Shim, Myungkyu, Forecast Dispersion in Finite-Player Forecasting Games (October 25, 2017). The B.E. Journal of Theoretical Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2509502 or http://dx.doi.org/10.2139/ssrn.2509502

Jin Yeub Kim (Contact Author)

Yonsei University - School of Economics ( email )

Seoul
Korea, Republic of (South Korea)

Myungkyu Shim

Yonsei University - School of Economics ( email )

Seoul
Korea, Republic of (South Korea)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
59
Abstract Views
953
rank
402,416
PlumX Metrics