Scenarios as channels of forecast advice
Author
Önkal, D.
Sayım, K. Z.
Gönül, M. S.
Date
2013-05Source Title
Technological Forecasting and Social Change
Print ISSN
0040-1625
Publisher
Elsevier
Volume
80
Issue
4
Pages
772 - 788
Language
English
Type
ArticleItem Usage Stats
133
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144
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Abstract
Today's business environment provides tougher competition than ever before, stressing the
important role played by information and forecasts in decision-making. The scenario method
has been popular for focused organizational learning, decision making and strategic thinking in
business contexts, and yet, its use in communicating forecast information and advice has
received little research attention. This is surprising since scenarios may provide valuable tools
for communication between forecast providers and users in organizations, offering efficient
platforms for information exchange via structured storylines of plausible futures. In this paper,
we aim to explore the effectiveness of using scenarios as channels of forecast advice. An
experimental study is designed to investigate the effects of providing scenarios as forecast
advice on individual and group-based judgmental predictions. Participants are given time
series information and model forecasts, along with (i) best-case, (ii) worst-case, (iii) both, or
(iv) no scenarios. Different forecasting formats are used (i.e., point forecast, best-case forecast,
worst-case forecast, and surprise probability), and both individual predictions and consensus
forecasts are requested. Forecasts made with and without scenarios are compared for each of
these formats to explore the potential effects of providing scenarios as forecast advice. In
addition, group effects are investigated via comparisons of composite versus consensus
predictions. The paper concludes with a discussion of results and implications for future
research on scenario use in forecasting.