Structured analogies for forecasting

Kesten Green and J. Armstrong

No 17/04, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: When people forecast, they often use analogies but in an unstructured manner. We propose a structured judgmental procedure that involves asking experts to list as many analogies as they can, rate how similar the analogies are to the target situation, and match the outcomes of the analogies with possible outcomes of the target. An administrator would then derive a forecast from the experts' information. We compared structured analogies with unaided judgments for predicting the decisions made in eight conflict situations. These were difficult forecasting problems; the 32% accuracy of the unaided experts was only slightly better than chance. In contrast, 46% of structured analogies forecasts were accurate. Among experts who were independently able to think of two or more analogies and who had direct experience with their closest analogy, 60% of forecasts were accurate. Collaboration did not improve accuracy.

Keywords: accuracy; analogies; collaboration; conflict; expert; forecasting; judgment. (search for similar items in EconPapers)
JEL-codes: D74 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-11
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Structured analogies for forecasting (2007)
Working Paper: Structured Analogies for Forecasting (2005)
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