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The Delphi method in forecasting financial markets— An experimental study

Karlo Kauko and Peter Palmroos

International Journal of Forecasting, 2014, vol. 30, issue 2, 313-327

Abstract: Experts were used as Delphi panellists and asked to present forecasts on financial market variables in a controlled experiment. We found that the respondents with the least accurate or least conventional views were particularly likely to modify their answers. Most of these modifications were in the right direction but too small, probably because of belief-perseverance bias. This paper also presents two post-survey adjustment methods for Delphi method based forecasts. First, we present a potential method to correct for the belief perseverance bias. The results seem promising. Secondly, we test a conditional forecasting process, which unexpectedly proves unsuccessful.

Keywords: Delphi method; Financial markets; Expert judgment; Belief perseverance; Overconfidence; Conditional forecasting (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.ijforecast.2013.09.007

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Handle: RePEc:eee:intfor:v:30:y:2014:i:2:p:313-327