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The Seer-Sucker Theory: The Value of Experts in Forecasting

Author

Listed:
  • JS Armstrong

    (The Wharton School - University of Pennsylvania)

Abstract

People are willing to pay heavily for expert advice. Economists are consulted to tell us how the economy will change, stock analysts are paid large salaries to forecast the earnings of various companies, and political experts command large fees to tell our leaders what the future holds. The available evidence, however, implies that this money is poorly spent. But because few people pay attention to this evidence, I have come up with what I call the 'seersucker theory': 'No matter how much evidence exists that seers do not exist, suckers will pay for the existence of seers.'

Suggested Citation

  • JS Armstrong, 2004. "The Seer-Sucker Theory: The Value of Experts in Forecasting," General Economics and Teaching 0412009, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpgt:0412009
    Note: Type of Document - pdf; pages: 7
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/get/papers/0412/0412009.pdf
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    Citations

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    Cited by:

    1. J. Scott Armstrong & Kesten C. Green & Willie Soon, 2008. "Polar Bear Population Forecasts: A Public-Policy Forecasting Audit," Interfaces, INFORMS, vol. 38(5), pages 382-405, October.
    2. Armstrong, J. Scott, 1983. "Strategic Planning and Forecasting Fundamentals," MPRA Paper 81682, University Library of Munich, Germany.
    3. J. S. Armstrong, 2005. "Review of Ravi Batra, The Great Depression of 1990 (Simon and Schuster, New York, 1985)," General Economics and Teaching 0502021, University Library of Munich, Germany.
    4. Ruan, Qingsong & Wang, Zilin & Zhou, Yaping & Lv, Dayong, 2020. "A new investor sentiment indicator (ISI) based on artificial intelligence: A powerful return predictor in China," Economic Modelling, Elsevier, vol. 88(C), pages 47-58.
    5. Kesten C. Green & J. Scott Armstrong, 2004. "Value of Expertise For Forecasting Decisions in Conflicts," Monash Econometrics and Business Statistics Working Papers 27/04, Monash University, Department of Econometrics and Business Statistics.

    More about this item

    Keywords

    seer-sucker theory; experts; forecasting;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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