Biases in judgmental adjustments of statistical forecasts: The role of individual differences
Judgmental adjustments of statistical forecasts are widely used for improving forecast accuracy. Despite the overall effectiveness of this method, it may allow forecasters to introduce biases in statistical forecasts when they judgmentally adjust them. This paper considers three types of bias: (1) optimism bias, (2) anchoring bias, and (3) overreaction bias. We explore the effects of particular individual differences, specifically personality, motivational orientation, and work locus of control, on forecasting biases. The results indicate that a forecaster's personality and motivational orientation have significant effects on forecasting biases, whereas work locus of control has no effect on forecasting biases. Our analysis further indicates that experience, work locus of control and motivational orientation drive a forecaster's willingness to judgmentally adjust a statistical forecast.
If 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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dilek Onkal & M. Sinan Gonul, 2005. "Judgmental Adjustment: A Challenge for Providers and Users of Forecasts," Foresight: The International Journal of Applied Forecasting, International Institute of Forecasters, issue 1, pages 13-17, June.
- Lawrence, Michael & Makridakis, Spyros, 1989. "Factors affecting judgmental forecasts and confidence intervals," Organizational Behavior and Human Decision Processes, Elsevier, vol. 43(2), pages 172-187, April.
- Klassen, Robert D. & Flores, Benito E., 2001. "Forecasting practices of Canadian firms: Survey results and comparisons," International Journal of Production Economics, Elsevier, vol. 70(2), pages 163-174, March.
- Robin M. Hogarth & Spyros Makridakis, 1981. "Forecasting and Planning: An Evaluation," Management Science, INFORMS, vol. 27(2), pages 115-138, February.
- Erez, Miriam & Gopher, Daniel & Arzi, Nira, 1990. "Effects of goal difficulty, self-set goals, and monetary rewards on dual task performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 47(2), pages 247-269, December.
- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Robert Carbone & Allan Andersen & Yvan Corriveau & Paul Piat Corson, 1983. "Comparing for Different Time Series Methods the Value of Technical Expertise Individualized Analysis, and Judgmental Adjustment," Management Science, INFORMS, vol. 29(5), pages 559-566, May.
- Lawrence, Michael & Goodwin, Paul & O'Connor, Marcus & Onkal, Dilek, 2006. "Judgmental forecasting: A review of progress over the last 25 years," International Journal of Forecasting, Elsevier, vol. 22(3), pages 493-518.
When requesting a correction, please mention this item's handle: RePEc:eee:intfor:v:26:y::i:1:p:116-133. See general 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: (Zhang, Lei)
If references are entirely missing, you can add them using this form.