2007-10-02
Experts adjusting model-based forecasts and the law of small numbers
Publication
Publication
Report / Econometric Institute, Erasmus University Rotterdam
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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hdl.handle.net/1765/10563 | |
Econometric Institute Research Papers | |
Report / Econometric Institute, Erasmus University Rotterdam | |
Organisation | Erasmus School of Economics |
Franses, P. H. (2007). Experts adjusting model-based forecasts and the law of small numbers (No. EI 2007-42). Report / Econometric Institute, Erasmus University Rotterdam. Retrieved from http://hdl.handle.net/1765/10563 |