Journal
JOURNAL OF BUSINESS RESEARCH
Volume 68, Issue 8, Pages 1800-1809Publisher
ELSEVIER SCIENCE INC
DOI: 10.1016/j.jbusres.2015.03.039
Keywords
Communication of forecasts; Simulation; Experience; Predictive judgments; Probabilistic inference; Decision making
Categories
Funding
- Spanish Ministerio de Economia y Competitividad [EC02009-09834, ECO2012-35545]
Ask authors/readers for more resources
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 naive 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. (C) 2015 Elsevier Inc. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available