This paper conjectures that the behaviour of experts who adjust statistical-model-based forecasts obeys the Law of Small Numbers [LSN]. To put this hypothesis to an empirical test, I propose a simple but effective methodology. It is applied to a database containing information on many experts and their adjustments to forecasts of monthly sales of a variety of products. I find strong evidence in support of the LSN. Implications of this finding are discussed.

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Keywords expert adjustment, law of small numbers, model-based forecast
Persistent URL
Series Econometric Institute Research Papers
Journal Report / Econometric Institute, Erasmus University Rotterdam
Franses, Ph.H.B.F. (2007). Experts adjusting model-based forecasts and the law of small numbers (No. EI 2007-42). Report / Econometric Institute, Erasmus University Rotterdam. Retrieved from