Probability Estimates by Respondents: Does Weighting Improve Accuracy?

Becker, Boris W.; Greenberg, Marshall G.

doi:10.1177/002224377801500318

Cited by 3 publications

(1 citation statement)

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“…We place probability weighting in the crisis preparation stage. Individuals tend to convert objective information about probability into a subjective view of what might happen (Becker & Greenberg, 1978; Mukherjee, 2011). Even when probabilities of outcomes are reliably known, they tend to create their own probability weights in a way that overemphasizes low-probability outcomes.…”

Section: A Be Perspective On CMmentioning

confidence: 99%

The contribution of behavioral economics to crisis management decision-making

Parnell

Crandall

2017

Journal of Management & Organization

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AbstractScholarly work in the field of crisis management has flourished in recent years with contributions from numerous disciplines, including strategic management, organizational behavior, public relations, risk management, and disaster management. However, the substantial and prospective applications from behavioral economics – from Herbert Simon to modern theorists – have yet to be systematically integrated into the literature. This paper presents a framework that categorizes applications from behavioral economics along three stages of the crisis management life cycle – crisis preparation, crisis action, and postcrisis. It provides insights for scholars and practitioners into the crisis decision-making process and outlines why ‘less-than-rational’ decision-making approaches often appear in crisis environments.

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Section: A Be Perspective On CMmentioning

confidence: 99%

The contribution of behavioral economics to crisis management decision-making

Parnell

Crandall

2017

Journal of Management & Organization

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Subjective confidence in forecasts

Fischhoff

MacGregor

1982

Journal of Forecasting

223

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Forecasts have little value to decision makers unless it is known how much confidence to place in them. Those expressions of confidence have, in turn, little value unless forecasters are able to assess the limits of their own knowledge accurately Previous research has shown very robust patterns in the judgements of individuals who have not received special training in confidence assessment: Knowledge generally increases as confidence increases. However, it increases too swiftly, with a doubling of confidence being associated with perhaps a 50 per cent increase in knowledge. With all but the easiest of tasks, people tend to be overconfident regarding how much they know These results have typically been derived from studies of judgements of general knowledge. The present study found that they also pertained to confidence in forecasts. Indeed, the confidence‐knowledge curves observed here were strikingly similar to those observed previously. The only deviation was the discovery that a substantial minority of judges never expressed complete confidence in any of their forecasts. These individuals also proved to be better assessors of the extent of their own knowledge Apparently confidence in forecasts is determined by processes similar to those that determine confidence in general knowledge. Decision makers can use forecasters assessments in a relative sense, in order to predict when they are more and less likely to be correct. However, they should be hesitant to take confidence assessments literally. Someone is more likely to be right when he or she is ‘certain’than when he or she is ‘fairly confident’; but there is no guarantee that the certain forecast will come true.

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