Author
Hogarth, R. M., Soyer, Emre
Publication Date
2015-08
Publication Place
-
Elsevier
Subject
Communication of forecasts, Simulation, Experience, Predictive judgments, Probabilistic inference, Decision making
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
0148-2963
Record ID
031376fe-70f3-4b92-a867-eb28294adc11
Library Location
Business Administration
Date
2015-08
Notes
Due to copyright restrictions, the access to the full text of this article is only available via subscription.
Sample Text
It is unclear whether decision makers who receive forecasts expressed as probability distributions over outcomes understand the implications of this form of communication. We suggest a solution based on the fact that people are effective at estimating the frequency of data accurately in environments that are characterized by plentiful, unbiased feedback. Thus, forecasters should provide decision makers with simulation models that allow them to experience the frequencies of potential outcomes. Before implementing this suggestion, however, it is important to assess whether people can make appropriate probabilistic inferences based on such simulated experience. In an experimental program, we find that statistically sophisticated and naïve individuals relate easily to this presentation mode, they prefer it to analytic descriptions, and their probabilistic inferences improve. We conclude that asking decision makers to use simulations actively is potentially a powerful – and simplifying – method to improve the practice of forecasting.
DOI
10.1016/j.jbusres.2015.03.039
Cilt
68
