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Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Do ‘big losses’ in judgmental adjustments to statistical forecasts affect experts’ behaviour?
AU - Petropoulos, Fotios
AU - Fildes, Robert Alan
AU - Goodwin, Paul
PY - 2016/3/16
Y1 - 2016/3/16
N2 - The behaviour of poker players and sports gamblers has been shown to change after winning or losing a significant amount of money on a single hand. In this paper, we explore whether there are changes in experts’ behaviour when performing judgmental adjustments to statistical forecasts and, in particular, examine the impact of ‘big losses’. We define a big loss as a judgmental adjustment that significantly decreases the forecasting accuracy compared to the baseline statistical forecast. In essence, big losses are directly linked with wrong direction or highly overshooting judgmental overrides. Using relevant behavioural theories, we empirically examine the effect of such big losses on subsequent judgmental adjustments exploiting a large multinational data set containing statistical forecasts of demand for pharmaceutical products, expert adjustments and actual sales. We then discuss the implications of our findings for the effective design of forecasting support systems, focusing on the aspects of guidance and restrictiveness.
AB - The behaviour of poker players and sports gamblers has been shown to change after winning or losing a significant amount of money on a single hand. In this paper, we explore whether there are changes in experts’ behaviour when performing judgmental adjustments to statistical forecasts and, in particular, examine the impact of ‘big losses’. We define a big loss as a judgmental adjustment that significantly decreases the forecasting accuracy compared to the baseline statistical forecast. In essence, big losses are directly linked with wrong direction or highly overshooting judgmental overrides. Using relevant behavioural theories, we empirically examine the effect of such big losses on subsequent judgmental adjustments exploiting a large multinational data set containing statistical forecasts of demand for pharmaceutical products, expert adjustments and actual sales. We then discuss the implications of our findings for the effective design of forecasting support systems, focusing on the aspects of guidance and restrictiveness.
KW - Forecasting
KW - Judgment
KW - Behavioural analytics
KW - Decision support systems
U2 - 10.1016/j.ejor.2015.06.002
DO - 10.1016/j.ejor.2015.06.002
M3 - Journal article
VL - 249
SP - 842
EP - 852
JO - European Journal of Operational Research
JF - European Journal of Operational Research
SN - 0377-2217
IS - 3
ER -