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Prototyping a financial DSS

Author

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  • Lawrence, Michael
  • Sim, William

Abstract

This paper explores, by means of a laboratory study, the ability of a financial DSS of known theoretical merit to improve decision-making for currency and interest rate forecasting where typically the task is to forecast direction of movement and to assess confidence. The study finds that while the decision-making is improved in comparison with a control, most of the potential value of the DSS is lost. In addition, no improvement in confidence assessment is observed. Both the DSS users and the control group exhibit very poor calibration with confidence assessments uncorrelated with accuracy.

Suggested Citation

  • Lawrence, Michael & Sim, William, 1999. "Prototyping a financial DSS," Omega, Elsevier, vol. 27(4), pages 445-450, August.
  • Handle: RePEc:eee:jomega:v:27:y:1999:i:4:p:445-450
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    References listed on IDEAS

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    1. Powell, Jack L., 1991. "An attempt at increasing decision rule use in a judgment task," Organizational Behavior and Human Decision Processes, Elsevier, vol. 48(1), pages 89-99, February.
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    3. Whitecotton, Stacey M., 1996. "The Effects of Experience and a Decision Aid on the Slope, Scatter, and Bias of Earnings Forecasts," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 111-121, April.
    4. Wilkie-Thomson, Mary E. & Onkal-Atay, Dilek & Pollock, Andrew C., 1997. "Currency forecasting: an investigation of extrapolative judgement," International Journal of Forecasting, Elsevier, vol. 13(4), pages 509-526, December.
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    6. Yates, J. Frank & McDaniel, Linda S. & Brown, Eric S., 1991. "Probabilistic forecasts of stock prices and earnings: The hazards of nascent expertise," Organizational Behavior and Human Decision Processes, Elsevier, vol. 49(1), pages 60-79, June.
    7. Arkes, Hal R. & Dawes, Robyn M. & Christensen, Caryn, 1986. "Factors influencing the use of a decision rule in a probabilistic task," Organizational Behavior and Human Decision Processes, Elsevier, vol. 37(1), pages 93-110, February.
    8. Makridakis, Spyros & Chatfield, Chris & Hibon, Michele & Lawrence, Michael & Mills, Terence & Ord, Keith & Simmons, LeRoy F., 1993. "The M2-competition: A real-time judgmentally based forecasting study," International Journal of Forecasting, Elsevier, vol. 9(1), pages 5-22, April.
    9. Remus, William & O'Conner, Marcus & Griggs, Kenneth, 1996. "Does Feedback Improve the Accuracy of Recurrent Judgmental Forecasts?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 22-30, April.
    10. O'Connor, Marcus, 1989. "Models of human behaviour and confidence in judgement: A review," International Journal of Forecasting, Elsevier, vol. 5(2), pages 159-169.
    11. Lawrence, Michael J. & Edmundson, Robert H. & O'Connor, Marcus J., 1985. "An examination of the accuracy of judgmental extrapolation of time series," International Journal of Forecasting, Elsevier, vol. 1(1), pages 25-35.
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    Cited by:

    1. Lawrence, Michael & Goodwin, Paul & Fildes, Robert, 2002. "Influence of user participation on DSS use and decision accuracy," Omega, Elsevier, vol. 30(5), pages 381-392, October.

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