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Journal Articles Management Science Year : 2006

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

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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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hal-00476866 , version 1 (27-04-2010)

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

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