Journal
ORGANIZATIONAL BEHAVIOR AND HUMAN DECISION PROCESSES
Volume 91, Issue 2, Pages 169-185Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
DOI: 10.1016/S0749-5978(03)00058-X
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Highly knowledgeable people often fail to achieve highly accurate judgments, a phenomenon sometimes called the process-performance paradox. The present research tested for this paradox in foreign exchange (FX) rate forecasting. Forty professional and 57 sophisticated amateur forecasters made one-day and one-week-ahead FX predictions in deterministic and probabilistic formats. Among the conclusions indicated by the results are: (a) professional accuracy usually surpasses amateur accuracy, although many amateurs outperform many professionals; (b) professionals appear to achieve high proficiency via heavy reliance on predictive information (unlike what has been observed before, e.g., for stock prices); (c) forecast format strongly affects judgment accuracy and processes; and (d) apparent overconfidence can transform itself into underconfidence depending on when and how forecasters must articulate their confidence. (C) 2003 Elsevier Science (USA). All rights reserved.
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