Evaluating the Rationality of Managers' Sales Forecasts
2011-11-14
Research Paper
pp 1-34.
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This paper deals with the analysis and evaluation of sales forecasts of managers, given that it is unknown how they constructed their forecasts. Our goal is to find out whether these forecasts are rational. To examine deviations from rationality, we argue that one has to approximate how the managers could have generated the forecasts. We describe several ways to construct these approximate expressions. The analysis of a large set of a single manager's forecasts for sales of pharmaceutical products illustrates the practical usefulness of our methodology.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- C53 : Forecasting and Other Model Applications
- C22 : Time-Series Models; Dynamic Quantile Regressions
Automatically Extracted Terms
- forecast
- revision
- error
- adjustment
- horizon
- intuition
- ν t |t
- model
- manager
- forecasting
- table
- information
- realization
- model forecasts
- approach
- result
- property
- method
- forecast errors
- δ t |t
