Contrast effects in judgmental forecasting when assessing the implications of worst- and best-case scenarios

Paul Goodwin, Mustafa Sinan Gonul, Dilek Onkal, Ayşe Kocabiyikoğlu, Celile Itir Göğüş

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Abstract

Two experiments investigated whether individuals’ forecasts of the demand for products and a stock market index assuming a best or worst-case scenario depend on whether they have seen a single scenario in isolation or whether they have also seen a second scenario presenting an opposing view of the future. Normatively, scenarios should be regarded as belonging to different plausible future worlds so that the judged implications of one scenario should not be affected when other scenarios are available. However, the results provided evidence of contrast effects in that the presentation of a second ‘opposite’ scenario led to more extreme forecasts consistent with the polarity of the original scenario. In addition, people were more confident about their forecasts based on a given scenario when two opposing scenarios were available. We examine the implications of our findings for the elicitation of point forecasts and judgmental prediction intervals and the biases that are often associated with them.
Original languageEnglish
Publication statusPublished - 19 Jun 2019
Event39th International Symposium on Forecasting - Thessaloniki, Greece
Duration: 16 Jun 201919 Jun 2019
https://whova.com/web/isf_201906/

Conference

Conference39th International Symposium on Forecasting
Abbreviated titleISF-2019
CountryGreece
CityThessaloniki
Period16/06/1919/06/19
Internet address

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