Professional vs. amateur judgment accuracy: The case of foreign exchange rates
Yates, J. F.
Simga Mugan, C.
Please cite this item using this persistent URLhttp://hdl.handle.net/11693/11278
Organizational Behavior and Human Decision Processes
- Department of Management 
Highly knowledgeable people often fail to achieve highly accurate judgments, a phenomenon sometimes called the ‘‘processperformance paradox.’’ The present research tested for this paradox in foreign exchange (FX) rate forecasting. Forty professional and 57 sophisticated amateur forecasters made one-day and one-week-ahead FX predictions in deterministic and probabilistic formats. Among the conclusions indicated by the results are: (a) professional accuracy usually surpasses amateur accuracy, although many amateurs outperform many professionals; (b) professionals appear to achieve high proficiency via heavy reliance on predictive information (unlike what has been observed before, e.g., for stock prices); (c) forecast format strongly affects judgment accuracy and processes; and (d) apparent overconfidence can transform itself into underconfidence depending on when and how forecasters must articulate their confidence. 2003 Elsevier Science (USA). All rights reserved.
Önkal, D., Yates, J. F., Simga-Mugan, C., & Öztin, Ş. (2003). Professional vs. amateur judgment accuracy: The case of foreign exchange rates. Organizational Behavior and Human Decision Processes, 91(2), 169-185.