Correcting Interval-Valued Expert Estimates: Empirical Formulas Explained

Abstract

Experts\u27 estimates are approximate. To make decisions based on these estimates, we need to know how accurate these estimate are. Sometimes, experts themselves estimate the accuracy of their estimates -- by providing the interval of possible values instead of a single number. In other cases, we can gauge the accuracy of the experts\u27 estimates by asking several experts to estimates the same quantity and using the interval range of these values. In both situations, sometimes the interval is too narrow -- e.g., if an expert is overconfident. Sometimes, the interval is too wide -- if the expert is too cautious. In such situations, we correct these intervals, by making them, correspondingly, wider or narrower. Empirical studies show that people use specific formulas for such corrections. In this paper, we provide a theoretical explanation for these empirical formulas