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The effectiveness of simple decision heuristics : Forecasting commercial success for early-stage ventures

Abstract : We investigate the decision heuristics used by experts to forecast that early-stage ventures are subsequently commercialized. Experts evaluate 37 project characteristics and subjectively combine data on all cues by examining both critical flaws and positive factors to arrive at a forecast. A conjunctive model is used to describe their process, which sums "good" and "bad" cue counts separately. This model achieves a 91.8% forecasting accuracy of the experts' correct forecasts. The model correctly predicts 86.0% of outcomes in out-of-sample, out-of-time tests. Results indicate that reasonably simple decision heuristics can perform well in a natural and very difficult decision-making context.
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https://hal-hec.archives-ouvertes.fr/hal-00476866
Contributor : Antoine Haldemann <>
Submitted on : Tuesday, April 27, 2010 - 2:31:13 PM
Last modification on : Tuesday, December 18, 2012 - 1:43:28 PM

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Thomas Astebro, Samir Elhedhli. The effectiveness of simple decision heuristics : Forecasting commercial success for early-stage ventures. Management Science, INFORMS, 2006, 52 (3), pp.395-409. ⟨10.1287/mnsc.1050.0468⟩. ⟨hal-00476866⟩

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