Judgmental adjustments of previously adjusted forecasts

Dilek Önkal*, M. Sinan Gönül, Michael Lawrence

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    23 Citations (Scopus)

    Abstract

    Forecasts are important components of information systems. They provide a means for knowledge sharing and thus have significant decision-making impact. In many organizations, it is quite common for forecast users to receive predictions that have previously been adjusted by providers or other users of forecasts. Current work investigates some of the factors that may influence the size and propensity of further adjustments on already-adjusted forecasts. Two studies are reported that focus on the potential effects of adjustment framing (Study 1) and the availability of explanations and/or original forecasts alongside the adjusted forecasts (Study 2). Study 1 provides evidence that the interval forecasts that are labeled as "adjusted" are modified less than the so-called "original/unadjusted" predictions. Study 2 suggests that the provision of original forecasts and the presence of explanations accompanying the adjusted forecasts serve as significant factors shaping the size and propensity of further modifications. Findings of both studies highlight the importance of forecasting format and user perceptions with critical organizational repercussions.

    Original languageEnglish
    Pages (from-to)213-238
    Number of pages26
    JournalDecision Sciences
    Volume39
    Issue number2
    DOIs
    Publication statusPublished - May 2008

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