Observers expect forecasters to show high confidence

Observers seem to focus on the target event and not its complement.  Bagchi and Ince have a new paper on this question:

Consumers routinely rely on forecasters to make predictions about uncertain events (e.g., sporting contests, stock fluctuations). The authors demonstrate that when forecasts are higher versus lower (e.g., a 70% vs. 30% chance of team A winning a game) consumers infer that the forecaster is more confident in her prediction, has conducted more in-depth analyses, and is more trustworthy. The prediction is also judged as more accurate. This occurs because forecasts are evaluated based on how well they predict the target event occurring (team A winning). Higher forecasts indicate greater likelihood of the target event occurring, and signal a confident analyst, while lower forecasts indicate lower likelihood and lower confidence in the target event occurring. But because, with lower forecasts, consumers still focus on the target event (and not its complement), lower confidence in the target event occurring is erroneously interpreted as the forecaster being less confident in her overall prediction (instead of more confident in the complementary event occurring—team A losing). The authors identify boundary conditions, generalize to other prediction formats, and demonstrate consequences.

Of course this also has relevance for the evolutionary processes governing pundits.

Here is a related press release (pdf).  For the pointer I thank Charles Klingman.


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