Determinants of linear judgment: A meta-analysis of lens model studies

The mathematical representation of Brunswik’s lens model has been used extensively to study human judgment and provides a unique opportunity to conduct a meta-analysis of studies that covers roughly five decades. Specifically, we analyze statistics of the “lens model equation” (Tucker, 1964) associated with 259 different task environments obtained from 78 papers. In short, we find – on average – fairly high levels of judgmental achievement and note that people can achieve similar levels of cognitive performance in both noisy and predictable environments. Although overall performance varies little between laboratory and field studies, both differ in terms of components of performance and types of environments (numbers of cues and redundancy). An analysis of learning studies reveals that the most effective form of feedback is information about the task. We also analyze empirically when bootstrapping is more likely to occur. We conclude by indicating shortcomings of the kinds of studies conducted to date, limitations in the lens model methodology, and possibilities for future research.Judgment, lens model, linear models, learning, bootstrapping

Willingness to Continue with Software Projects: Effects of Feedback Direction and Optimism under High and Low Accountability Conditions

The willingness of managers to continue with software projects can be both beneficial and troubling. Management optimism can help bring promising projects to fruition, but can also cause valuable resources to be expended on faltering projects. This study examines three factors that can affect the willingness of managers to continue with software projects: feedback direction, feedback optimism, and accountability. Feedback direction is the objective information reflecting project prospects. Feedback optimism is the subjective mode with which the objective information has been framed. Accountability is the extent to which the manager feels responsible for project outcomes. Results of a study that manipulated these three factors showed that the effects of feedback direction and feedback optimism on willingness to continue with software projects were additive (either factor alone affected willingness to continue with software projects) when accountability was high but were interactive (both factors jointly affected willingness to continue with software projects) when accountability was low. These findings have useful implications for practice and further research

Judgmental forecasting

[No abstract available

Market Feedback and Valuation Judgment: Revisited

Appraisers receive feedback from a variety of sources such as other appraisers, clients and the real estate market. Previous studies find client feedback to introduce an upward bias into commercial and residential appraisal judgments. Hansz and Diaz (2001) find that the provision of transaction price (market) feedback for a previously valued property biases commercial appraisers upwardly in subsequent valuations. The authors provide market optimism, client feedback and a reduced conservatism bias as explanations for their findings. However, previous client and market feedback studies were conducted in upward-trending or booming real estate markets. The identified upward bias in valuation judgments may have been the result of positive real estate market conditions. This study investigates the impact of transaction price feedback on residential appraisal judgment in a changed appraisal task environment, characterized by a depressed housing market, market pessimism, conservative lenders and a changed residential appraisal industry. As Hansz and Diaz (2001) find an upward appraisal bias in an upward-trending market, I expect market feedback to introduce a downward bias into residential appraisal judgments in a depressed market. Compared to a “no feedback” control group, residential appraisers receiving the feedback that their previous value estimates were too high, compared to the realized transaction price, are expected to make significantly lower subsequent value judgments for an unrelated property. The “too low” feedback is not expected to have an impact on subsequent value judgments. I test the hypotheses with a controlled experiment using a pre-posttest design. The experimental design has one factor (transaction price feedback) fixed at three different levels (“too low”, “too high”, “no feedback”). A posttest-only validity control group is added to test for a potential testing bias in the pre-posttest design. This study uses residential expert appraisers, defined as active Oregon State certified residential appraisers, from the Portland metropolitan statistical area (MSA) as subjects. Experimental subjects are randomly selected from a list of all certified residential appraisers in the Portland MSA. Experimental subjects are randomly assigned to the control and treatment groups (10 subjects per group; N=40). Subjects in the treatment groups and pre-posttest “no feedback” control group are asked to value a lot of vacant residential land in the geographically unfamiliar Roswell, Georgia. After they provide their value estimates for this first valuation case, subjects in the treatment groups are given a note from a seller’s broker stating the transaction price for the previously valued property. Subjects in the “too high” feedback group receive a transaction price that is 15% below their estimates and subjects in the “too low” feedback group receive a transaction price that is 15% above their value estimates. The control group receives no feedback. All treatment and control groups are then given a second (unrelated) valuation case of vacant residential land in Newnan, Georgia and asked for their value estimate. The experiment is concluded with an exit questionnaire containing demographic and professional questions as well as manipulation checks. The experimental data are analyzed using the parametric independent samples t-test. The assumptions of normality and equal variances are not violated by the dataset. A one-way ANOVA and the non-parametric Mann-Whitney U test are used as robustness checks. All statistical tests conclude that neither the mean of the “too high” feedback group nor the mean of the “too low” feedback group are statistically different at the 5% level from the mean of the “no feedback” control group. Thus, no evidence is found that transaction price feedback biases residential appraisal judgments in a depressed market. The insignificant results are further analyzed to assess whether they are due to a non-reception of the treatment by subjects, low statistical power or a non-existing relationship: The explanation that subjects did not read the treatment note can be excluded. A power analysis reveals low statistical power and very small effect sizes for both treatments. An alternative explanation for the insignificant results is the absence of the hypothesized relationship. The main client group of experimental subjects is appraisal management companies, which due to legislation passed after 2007, work with appraisers on behalf of lenders. As a consequence, residential appraisers do not receive direct client feedback anymore (compared to Hansz and Diaz, 2001) and may not respond subconsciously to the “too high” feedback

Short-term sales forecasting - Case Nokian Tyres plc in the US

Sales forecasting is an important process for every business to master regardless of the company size or industry. Accurate forecasts allow the company to answer customer demand better and hence, the company to increase its sales and decrease its costs. The ability to forecast sales more accurately than competitors may also work as a valuable competitive advantage as the company is better at exploiting positive market opportunities while avoiding those that destroy value. Some argue that sales forecasting is impossible, however, this thesis refutes the thought. In fact, with some simple methods, a company can increase its sales forecasting accuracy considerably. The purpose of the thesis is to explore how an accurate short-term sales forecast can be provided and to exploit these findings when forecasting the short-term replacement tire sales of Nokian Tyres in the US. In the first, theoretical part of the thesis, the short-term sales forecasting process is explored by answering questions such as from which components a sales time series is composed and whether a qualitative or quantitative forecasting method should be preferred. From the main findings, a theoretical framework is built, which is then tested in practice. This forms the second, empirical part of the thesis. According to the theoretical framework, actions such as aggregating homogenous time series, estimating seasonality components, and using quantitative exponential smoothing methods, either alone or in combination, should increase the short-term sales forecasting accuracy considerably. These and other findings were tested on 17 tire product family sales of Nokian Tyres in the US replacement tire market, which is the biggest in the world. In total, the research concluded the study of five market area segmentations, five seasonal indices, 11 forecasting methods, and three method combinations. The results are astonishing. The forecasting accuracy was increased 500 percent compared with the current practices - a finding that, if well exploited, can theoretically provide a yearly economic gain of hundreds of thousands of euros for the company. In addition to the economic importance of sales forecasting for businesses, the current research topic is also important for the academic community. This is especially because sales forecasting is closely linked to quantifying marketing actions, which the Marketing Science Institute has set as a tier one research subject. Hence, as the interests of practitioners and academicians clearly meet in this thesis, this work can also be seen to decrease the gap between the interests of practitioners and academics that currently prevail in the marketing discipline. --- Myynnin ennustaminen on yksi yhtiön avainprosesseista sen koosta ja toimialasta riippumatta. Tarkempi myynnin ennustaminen muun muassa auttaa yhtiötä paremmin vastaamaan asiakkaiden kysyntään, joka taas mahdollistaa yhtiön sekä kasvattaa myyntiä että laskea kustannuksia. Kilpailijoita parempi kyky ennustaa voi toimia myös yhtiön kilpailuetuna, sillä tällöin yhtiö pystyy muita paremmin valitsemaan kannattavat ja välttämään arvoa tuhoavat hankkeet. Jotkut ajattelevat myynnin ennustamisen olevan mahdotonta, mutta tämä työ kuitenkin selvästi osoittaa tämän ajattelun olevan väärin. Todellisuudessa jopa suhteellisen yksinkertaisilla menetelmillä myynnin ennustetarkkuutta voidaan kasvattaa huomattavasti. Tämän työn tarkoituksen on tutkia, miten tarkka lyhyenajan myyntiennuste tehdään ja hyödyntää näitä löytöjä ennustettaessa Nokian Renkaiden rengasmyyntiä Yhdysvalloissa. Tutkielman ensimmäinen osa koostuu teoreettisesta osasta, jossa myynnin ennustamista tutkitaan muun muassa vastaamalla kysymyksiin mistä komponenteista myynnin aikasarja muodostuu, miten nämä komponentit tulisi ottaa huomioon ennustettaessa ja tulisiko myyntiä ennustaa joko kvalitatiivisilla vai kvantitatiivisilla menetelmillä. Lopuksi teoriaosuuden tärkeimmistä löydöistä rakennetaan teoreettinen viitekehys. Teoreettisen viitekehyksen mukaan toimet, kuten myynnin aikasarjojen yhdistäminen, kausaalikomponenttien estimointi ja silottavien eksponenttiennustusmallien käyttäminen parantavat lyhyenajan myynnin ennustetarkkuutta. Näiden ja myös muiden teoriaosassa tehtyjen löytöjen toimivuutta tutkitaan ennustamalla Nokian Renkaiden 17 rengastuoteperheen myyntiä maailman suurimmilla rengasmarkkinoilla Yhdysvalloissa. Tämä tutkimus muodostaa työn toisen osan. Yhteensä empiriaosuudessa tutkitaan viiden markkina-aluejaon, viiden kausaali-indeksin, 11 ennustusmallin ja kolmen ennustusmalliyhdistelmän vaikutusta ennustetarkkuuteen. Tutkimuksen löydöt ovat merkittävät. Suhteellisen yksinkertaisilla menetelmillä ennustetarkkuus parani yli kuusinkertaiseksi verrattuna nykyisiin ennustusmenetelmiin. Hyvin hyödynnettyinä nämä löydöt voivat teoriassa mahdollistaa yhtiön kasvattaa myyntiä ja laskea kustannuksia vuositasolla jopa satojen tuhansien eurojen edestä. Sen lisäksi, että myynnin ennustaminen on merkittävä prosessi yhtiöille, tämä on myös tärkeä tutkimusaihe markkinoinnin akateemikoille. Tämä erityisesti sen takia, että myynnin ennustaminen on läheisesti sidoksissa markkinoinnin vaikutuksien rahalliseen mittaamiseen, jonka Marketing Science Institute on asettanut yhdeksi tärkeimmistä tämänhetkisistä markkinoinnin tutkimusaiheista. Koska tässä työssä selvästi liike-elämän ja markkinoinnin akateemikoiden intressit kohtaavat, tämän työn voidaan nähdä myös kaventavan näiden sidosryhmien välillä vallitsevaa intressikuilua

Short-term sales forecasting - Case Nokian Tyres plc in the US

Sales forecasting is an important process for every business to master regardless of the company size or industry. Accurate forecasts allow the company to answer customer demand better and hence, the company to increase its sales and decrease its costs. The ability to forecast sales more accurately than competitors may also work as a valuable competitive advantage as the company is better at exploiting positive market opportunities while avoiding those that destroy value. Some argue that sales forecasting is impossible, however, this thesis refutes the thought. In fact, with some simple methods, a company can increase its sales forecasting accuracy considerably. The purpose of the thesis is to explore how an accurate short-term sales forecast can be provided and to exploit these findings when forecasting the short-term replacement tire sales of Nokian Tyres in the US. In the first, theoretical part of the thesis, the short-term sales forecasting process is explored by answering questions such as from which components a sales time series is composed and whether a qualitative or quantitative forecasting method should be preferred. From the main findings, a theoretical framework is built, which is then tested in practice. This forms the second, empirical part of the thesis. According to the theoretical framework, actions such as aggregating homogenous time series, estimating seasonality components, and using quantitative exponential smoothing methods, either alone or in combination, should increase the short-term sales forecasting accuracy considerably. These and other findings were tested on 17 tire product family sales of Nokian Tyres in the US replacement tire market, which is the biggest in the world. In total, the research concluded the study of five market area segmentations, five seasonal indices, 11 forecasting methods, and three method combinations. The results are astonishing. The forecasting accuracy was increased 500 percent compared with the current practices - a finding that, if well exploited, can theoretically provide a yearly economic gain of hundreds of thousands of euros for the company. In addition to the economic importance of sales forecasting for businesses, the current research topic is also important for the academic community. This is especially because sales forecasting is closely linked to quantifying marketing actions, which the Marketing Science Institute has set as a tier one research subject. Hence, as the interests of practitioners and academicians clearly meet in this thesis, this work can also be seen to decrease the gap between the interests of practitioners and academics that currently prevail in the marketing discipline. --- Myynnin ennustaminen on yksi yhtiön avainprosesseista sen koosta ja toimialasta riippumatta. Tarkempi myynnin ennustaminen muun muassa auttaa yhtiötä paremmin vastaamaan asiakkaiden kysyntään, joka taas mahdollistaa yhtiön sekä kasvattaa myyntiä että laskea kustannuksia. Kilpailijoita parempi kyky ennustaa voi toimia myös yhtiön kilpailuetuna, sillä tällöin yhtiö pystyy muita paremmin valitsemaan kannattavat ja välttämään arvoa tuhoavat hankkeet. Jotkut ajattelevat myynnin ennustamisen olevan mahdotonta, mutta tämä työ kuitenkin selvästi osoittaa tämän ajattelun olevan väärin. Todellisuudessa jopa suhteellisen yksinkertaisilla menetelmillä myynnin ennustetarkkuutta voidaan kasvattaa huomattavasti. Tämän työn tarkoituksen on tutkia, miten tarkka lyhyenajan myyntiennuste tehdään ja hyödyntää näitä löytöjä ennustettaessa Nokian Renkaiden rengasmyyntiä Yhdysvalloissa. Tutkielman ensimmäinen osa koostuu teoreettisesta osasta, jossa myynnin ennustamista tutkitaan muun muassa vastaamalla kysymyksiin mistä komponenteista myynnin aikasarja muodostuu, miten nämä komponentit tulisi ottaa huomioon ennustettaessa ja tulisiko myyntiä ennustaa joko kvalitatiivisilla vai kvantitatiivisilla menetelmillä. Lopuksi teoriaosuuden tärkeimmistä löydöistä rakennetaan teoreettinen viitekehys. Teoreettisen viitekehyksen mukaan toimet, kuten myynnin aikasarjojen yhdistäminen, kausaalikomponenttien estimointi ja silottavien eksponenttiennustusmallien käyttäminen parantavat lyhyenajan myynnin ennustetarkkuutta. Näiden ja myös muiden teoriaosassa tehtyjen löytöjen toimivuutta tutkitaan ennustamalla Nokian Renkaiden 17 rengastuoteperheen myyntiä maailman suurimmilla rengasmarkkinoilla Yhdysvalloissa. Tämä tutkimus muodostaa työn toisen osan. Yhteensä empiriaosuudessa tutkitaan viiden markkina-aluejaon, viiden kausaali-indeksin, 11 ennustusmallin ja kolmen ennustusmalliyhdistelmän vaikutusta ennustetarkkuuteen. Tutkimuksen löydöt ovat merkittävät. Suhteellisen yksinkertaisilla menetelmillä ennustetarkkuus parani yli kuusinkertaiseksi verrattuna nykyisiin ennustusmenetelmiin. Hyvin hyödynnettyinä nämä löydöt voivat teoriassa mahdollistaa yhtiön kasvattaa myyntiä ja laskea kustannuksia vuositasolla jopa satojen tuhansien eurojen edestä. Sen lisäksi, että myynnin ennustaminen on merkittävä prosessi yhtiöille, tämä on myös tärkeä tutkimusaihe markkinoinnin akateemikoille. Tämä erityisesti sen takia, että myynnin ennustaminen on läheisesti sidoksissa markkinoinnin vaikutuksien rahalliseen mittaamiseen, jonka Marketing Science Institute on asettanut yhdeksi tärkeimmistä tämänhetkisistä markkinoinnin tutkimusaiheista. Koska tässä työssä selvästi liike-elämän ja markkinoinnin akateemikoiden intressit kohtaavat, tämän työn voidaan nähdä myös kaventavan näiden sidosryhmien välillä vallitsevaa intressikuilua

Dance your way through entrepreneurial irrationality, errors, and rejection: unveiling entrepreneurial cognition, decisions, and learning under complex circumstances

The entrepreneurial journey is an emotional rollercoaster with unpredictable ups and downs, and entrepreneurial actions are performed in an ill-defined environment. For educational psychologists, the strengthening of students’ abilities to solve and reflect on ill-defined situations of the venturing process is the main learning objective. The discipline of entrepreneurship can benefit from research that enables clarification towards the entrepreneurial context and understanding of the individual’s behavior that promotes new venture formation. Hence, this dissertation contributes to establishing a better understanding of the complex and dynamic entrepreneurial context and particularly on the cognitive aspects that facilitate entrepreneurial activities. The focus lies particularly on promoting academic entrepreneurship. There is growing recognition that research on college students is central to the development of entrepreneurial activities and this group should receive higher attention. For this purpose, four studies have been carried out to provide novel insights into entrepreneurial cognition, learning, and academic entrepreneurship. The first study is dedicated to detangling the complex nature of the entrepreneurial environment. Literature calls for novel research that provides more clarity on the role of rationality that enables to unveil the relationship between the precarious circumstances and entrepreneurial action. More so, integrating the concept of rationality in entrepreneurship education can help prepare college students towards situations in which lack of information is dominant. While the first study strives to understand the contextual environment of entrepreneurial decisions, the second study investigates entrepreneurial activities from a cognitive-psychological point of view. A central concept for entrepreneurial activities is opportunity recognition. The second study focuses on cognitive factors that affect the process of opportunity recognition. The intention of this study is to explain the emergence of entrepreneurial opportunities and to contribute to differentiating between entrepreneurs and non-entrepreneurs. The third study continues with analyzing factors that influence entrepreneurial activities and examines the impact of entrepreneurial rejection on the individual’s decision to continue with the entrepreneurial opportunity. Finally, the last study is dedicated to understanding troubling concepts during the process of entrepreneurial learning. Entrepreneurship education bears the potential to equip future entrepreneurs with the entrepreneurial competencies required to deal with challenging situations during the venturing process. Thus, the final study investigates troublesome knowledge in entrepreneurship education in order to provide practical implications for dealing with these obstacles