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Comparing face-to-face meetings, nominal groups, Delphi and prediction markets on an estimation task

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  • Graefe, Andreas
  • Armstrong, J. Scott

Abstract

We conducted laboratory experiments for analyzing the accuracy of three structured approaches (nominal groups, Delphi, and prediction markets) relative to traditional face-to-face meetings (FTF). We recruited 227 participants (11 groups per method) who were required to solve a quantitative judgment task that did not involve distributed knowledge. This task consisted of ten factual questions, which required percentage estimates. While we did not find statistically significant differences in accuracy between the four methods overall, the results differed somewhat at the individual question level. Delphi was as accurate as FTF for eight questions and outperformed FTF for two questions. By comparison, prediction markets did not outperform FTF for any of the questions and were inferior for three questions. The relative performances of nominal groups and FTF were mixed and the differences were small. We also compared the results from the three structured approaches to prior individual estimates and staticized groups. The three structured approaches were more accurate than participants’ prior individual estimates. Delphi was also more accurate than staticized groups. Nominal groups and prediction markets provided little additional value relative to a simple average of the forecasts. In addition, we examined participants’ perceptions of the group and the group process. The participants rated personal communications more favorably than computer-mediated interactions. The group interactions in FTF and nominal groups were perceived as being highly cooperative and effective. Prediction markets were rated least favourably: prediction market participants were least satisfied with the group process and perceived their method as the most difficult.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Forecasting.

Volume (Year): 27 (2011)
Issue (Month): 1 ()
Pages: 183-195

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Handle: RePEc:eee:intfor:v:27:y:2011:i:1:p:183-195

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Web page: http://www.elsevier.com/locate/ijforecast

Related research

Keywords: Forecast accuracy; Group decision-making; Method comparison; Satisfaction; Combining;

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References

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  1. repec:reg:rpubli:259 is not listed on IDEAS
  2. repec:reg:wpaper:259 is not listed on IDEAS
  3. Paul W. Rhode & Koleman S. Strumpf, 2004. "Historical Presidential Betting Markets," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 127-141, Spring.
  4. Berg, Joyce E. & Nelson, Forrest D. & Rietz, Thomas A., 2008. "Prediction market accuracy in the long run," International Journal of Forecasting, Elsevier, vol. 24(2), pages 285-300.
  5. David M. Boje & J. Keith Murnighan, 1982. "Group Confidence Pressures in Iterative Decisions," Management Science, INFORMS, vol. 28(10), pages 1187-1196, October.
  6. Kesten Green & J. Scott Armstrong & Andreas Graefe, 2007. "Methods to Elicit Forecasts from Groups: Delphi and Prediction Markets Compared," Foresight: The International Journal of Applied Forecasting, International Institute of Forecasters, issue 8, pages 17-20, Fall.
  7. Justin Wolfers & Eric Zitzewitz, 2004. "Prediction Markets," Discussion Papers 03-025, Stanford Institute for Economic Policy Research.
  8. Rowe, Gene & Wright, George, 1999. "The Delphi technique as a forecasting tool: issues and analysis," International Journal of Forecasting, Elsevier, vol. 15(4), pages 353-375, October.
  9. Jed D. Christiansen, 2007. "Prediction Markets: Practical Experiments in Small Markets and Behaviours Observed," Journal of Prediction Markets, University of Buckingham Press, vol. 1(1), pages 17-41, February.
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Cited by:
  1. Cary Deck & David Porter, 2013. "Prediction Markets in the Laboratory," Working Papers 13-05, Chapman University, Economic Science Institute.
  2. Kauko, Karlo & Palmroos, Peter, 2014. "The Delphi method in forecasting financial markets— An experimental study," International Journal of Forecasting, Elsevier, vol. 30(2), pages 313-327.
  3. Wright, George & Rowe, Gene, 2011. "Group-based judgmental forecasting: An integration of extant knowledge and the development of priorities for a new research agenda," International Journal of Forecasting, Elsevier, vol. 27(1), pages 1-13, January.
  4. Griffiths, Frances & Cave, Jonathan & Boardman, Felicity & Ren, Justin & Pawlikowska, Teresa & Ball, Robin & Clarke, Aileen & Cohen, Alan, 2012. "Social networks – The future for health care delivery," Social Science & Medicine, Elsevier, vol. 75(12), pages 2233-2241.

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