Access
You are not currently logged in.
Access your personal account or get JSTOR access through your library or other institution:
Why are Professional Forecasters Biased? Agency Versus Behavioral Explanations
Tilman Ehrbeck and Robert Waldmann
The Quarterly Journal of Economics
Vol. 111, No. 1 (Feb., 1996), pp. 21-40
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2946656
Page Count: 20
- Item Type
- Article
- Thumbnails
- References
Abstract
Professional forecasters may not simply aim to minimize expected squared forecast errors. In models with repeated forecasts the pattern of forecasts reveals valuable information about the forecasters even before the outcome is realized. Rational forecasters will compromise between minimizing errors and mimicking prediction patterns typical of able forecasters. Simple models based on this argument imply that forecasts are biased in the direction of forecasts typical of able forecasters. Our models of strategic bias are rejected empirically as forecasts are biased in directions typical of forecasters with large mean squared forecast errors. This observation is consistent with behavioral explanations of forecast bias.
Page Thumbnails
-
[21]
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
The Quarterly Journal of Economics © 1996 Oxford University Press