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The psychology of economic forecasting

Author

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  • Karl Wennberg
  • Bjorn Nykvist

Abstract

Is the imprecision of economic forecasts due to the judgements of biased decision makers? This study explores decision making among expert forecasters in Sweden using semistructured interviews. The results indicate that forecasters' decision processes are characterised by intuitive, as well as calculating reasoning, gradually adopting mental models and conflicting goals. This indicates that forecasters are better described as ecologically rational rather than biased decision makers. A consequence is that behavioural forecasting research would benefit from taking into account the specific decision-making environment in which forecasters operate.

Suggested Citation

  • Karl Wennberg & Bjorn Nykvist, 2007. "The psychology of economic forecasting," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 9(2/3), pages 211-226.
  • Handle: RePEc:ids:gbusec:v:9:y:2007:i:2/3:p:211-226
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    Cited by:

    1. Berg, Nathan, 2014. "Success from satisficing and imitation: Entrepreneurs' location choice and implications of heuristics for local economic development," Journal of Business Research, Elsevier, vol. 67(8), pages 1700-1709.

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