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EOR
2007

Heuristic modeling of expectation formation in a complex experimental information environment

13 years 10 months ago
Heuristic modeling of expectation formation in a complex experimental information environment
Academic subjects made judgmental forecasts of a graphically presented time series in a laboratory experiment. Besides the past realizations of the time series itself, the only available information for the forecasting task was provided by leading series, i.e. indicators with a constant lead period of one. The number and the quality of the leading series were varied systematically between seven versions of the experiment resulting in different levels of information complexity. We present a heuristic that explains the subjectsÕ average forecasting behavior better than the rational expectations hypothesis in all versions of the experiment. Furthermore, we find that the forecasting accuracy of the subjects increases with the number of reliable indicators but their efficiency declines with increasing complexity. Ó 2005 Elsevier B.V. All rights reserved.
Otwin Becker, Johannes Leitner, Ulrike Leopold-Wil
Added 13 Dec 2010
Updated 13 Dec 2010
Type Journal
Year 2007
Where EOR
Authors Otwin Becker, Johannes Leitner, Ulrike Leopold-Wildburger
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