Asa Palley

 

Faculty Candidate Asa Palley [The Fuqua School of Business]
Title Eliciting and Aggregating Forecests When Information is Shared
Date & Time Wednesday, February 3, 2016 at 10:30am
Place UCLA Anderson School of Management 
Room TBD

 

Abstract
Using the wisdom of crowds-combining many individual forecasts to obtain an aggregate estimate-can be an elective technique for improving forecast accuracy. However, correlated forecast errors greatly limit the ability of the wisdom of crowds to recover the truth. In practice, this dependence often emerges because information is shared. To address this problem, we propose an elicitation procedure in which each respondent is asked to provide both their own best forecast and a guess of the average forecast that will be given by all other respondents. We develop an aggregation method, called pivoting, which separates individual forecasts into shared and private information and then recombines these results in the optimal manner. In several studies, we investigate the method and examine the accuracy of the aggregate forecasts. Overall, the empirical data suggest that the pivoting method provides an elective forecast aggregation procedure that can significantly outperform the simple crowd average.

Asa Palley