The relative influence of advice from human experts and statistical methods on forecast adjustments

Dilek Önkal, Paul Goodwin, Mary E. Thomson, Sinan Gönül, Andrew C. Pollock

Research output: Contribution to journalArticle

Abstract

Decision makers and forecasters often receive advice from different sources including human experts and statistical methods. This research examines, in the context of stock price forecasting, how the apparent source of the advice affects the attention that is paid to it when the mode of delivery of the advice is identical for both sources. In Study 1, two groups of participants were given the same advised point and interval forecasts. One group was told that these were the advice of a human expert and the other that they were generated by a statistical forecasting method. The participants were then asked to adjust forecasts they had previously made in light of this advice. While in both cases the advice led to improved point forecast accuracy and better calibration of the prediction intervals, the advice which apparently emanated from a statistical method was discounted much more severely.

Original languageEnglish
Pages (from-to)390-409
Number of pages20
JournalJournal of Behavioral Decision Making
Volume22
Issue number4
Early online date9 Feb 2009
DOIs
Publication statusPublished - Oct 2009

Keywords

  • forecasting
  • role of experts
  • forecast adjustment
  • source framing

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