Why Are Professional Forecasters Biased? Agency versus Behavioral Explanations
AbstractProfessional forecasters may not simply aim to minimize expected squared forecast errors. In models with repeated forecasts, the pattern of forecasts reveals valuable information about the forecasters even before the outcome is realized. Rational forecasters will compromise between minimizing errors and mimicking prediction patterns typical of able forecasters. Simple models based on this argument imply that forecasts are biased in the direction of forecasts typical of able forecasters. The authors' models of strategic bias are rejected empirically as forecasts are biased in directions typical of forecasters with large mean squared forecast errors. This observation is consistent with behavioral explanations of forecast bias. Copyright 1996, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 111 (1996)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://mitpress.mit.edu/journals/
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Were economists wrong because of economic incentives ?
by Robert in angry bear on 2011-02-08 02:20:00
- Department of "Huh?"
by Brad DeLong in Grasping Reality with the Invisible Hand on 2007-03-08 23:53:05
- Matthew Yglesias writes
Ragu Rajan ... his explanation of why
by Robert in Robert's Stochastic Thoughts on 2011-02-07 18:30:00
- The fighting punditariat
by The Economist in Free Exchange on 2007-03-09 21:33:00
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If references are entirely missing, you can add them using this form.