Professional vs. amateur judgment accuracy: The case of foreign exchange rates
Yates, J. F.
Simga Mugan, C.
Organizational Behavior and Human Decision Processes
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.
Please cite this item using this persistent URLhttp://hdl.handle.net/11693/11278
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.
- Department of Management