Assessing probability distributions by the fractile method: Evidence from managers

Publication Type

Journal Article

Publication Date

1986

Abstract

Various approaches have been offered as aids for assessing subjective probability distributions. These include the fractile method, the method of relative heights and applications of psychometric methods, e.g. multi-dimensional scaling. Previous laboratory research has examined and compared these methods primarily using undergraduate students rather than relatively experienced or practising managers. In this study of the fractile method, the experimental subjects were managers who had an ongoing instructional relationship with the authors. Therefore, conclusions can be drawn about practising managers' biases in probability assessment. Groups with more expertise in statistics and more managerial experience were found to be better calibrated than those with lower expertise and less experience. Training was also found to improve assessment performance.

Discipline

Business | Management Sciences and Quantitative Methods | Strategic Management Policy

Research Areas

Strategy and Organisation

Publication

Omega

Volume

14

Issue

5

First Page

401

Last Page

407

ISSN

0305-0483

Identifier

10.1016/0305-0483(86)90081-2

Publisher

Elsevier

Additional URL

https://doi.org/10.1016/0305-0483(86)90081-2

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