Forecast Dispersion in Finite-Player Forecasting Games
-
Jin Yeub Kim
and
Myungkyu Shim
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 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.
Acknowledgements
We appreciate the very helpful suggestions from two anonymous referees. We also thank many for helpful comments and discussions, in particular, Lars Stole, Wilbert van der Klaauw, Jaeok Park, and the seminar participants at Michigan State University, Sogang University, Yonsei University, the Fall 2014 Midwest Economic Theory Conference, the 84th Annual Meetings of the Southern Economic Association, and the 11th World Congress of the Econometric Society.
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Articles in the same Issue
- Articles
- Privatizing Multi-subsidiary Public Firm in Location Model
- Efficient Combinatorial Allocations: Individual Rationality versus Stability
- On Decay Centrality
- Sequential Auctions with Decreasing Reserve Prices
- The core of a strategic game
- Targeted Advertising on Competing Platforms
- Representation in Multi-Issue Delegated Bargaining
- Endogenous Mergers in Markets with Vertically Differentiated Products
- Standards of Proof and Civil Litigation: A Game-Theoretic Analysis
- Retained Earnings, Interest Rates and Lending Relationship
- Uniform Price Auctions with Asymmetric Bidders
- Conformity and Influence
- Sellouts, Beliefs, and Bandwagon Behavior
- Notes
- Eco-Firms and the Sequential Adoption of Environmental Corporate Social Responsibility in the Managerial Delegation
- Vertical Contract and Competition Intensity in Hotelling’s Model
- Constrained Allocation of Projects to Heterogeneous Workers with Preferences over Peers
- Irrelevance of the Strategic Variable in the Case of Relative Performance Maximization
- Critical Efficiencies as Upward Pricing Pressure with Feedback Effects
- On the Openness of Unique Pure-Strategy Nash Equilibrium
- Forecast Dispersion in Finite-Player Forecasting Games
