Judgmental Forecasting: Cognitive Reflection and Decision Speed

Judgmental Forecasting: Cognitive Reflection and Decision Speed

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Article ID: iaor201524749
Volume: 23
Issue: 7
Start Page Number: 1146
End Page Number: 1160
Publication Date: Jul 2014
Journal: Production and Operations Management
Authors: , ,
Keywords: time series: forecasting methods, management, performance, information
Abstract:

This research analyzes how individual differences affect performance in judgmental time‐series forecasting. Decision makers with the ability to balance intuitive judgment with cognitive deliberation, as measured by the cognitive reflection test, tend to have lower forecast errors. This relationship holds when controlling for intelligence. Furthermore, forecast errors increase for very fast or very slow decisions. We provide evidence that forecast performance can be improved by manipulating decision speed.

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