On Ignoring Scientific Evidence: The Bumpy Road to Enlightenment
33 Pages Posted: 24 Jul 2007
Date Written: May 2006
It is well accepted that people resist evidence that contradicts their beliefs. Moreover, despite their training, many scientists reject results that are inconsistent with their theories. This phenomenon is discussed in relation to the field of judgment and decision making by describing four case studies. These concern findings that "clinical" judgment is less predictive than actuarial models; simple methods have proven superior to more "theoretically correct" methods in times series forecasting; equal weighting of variables is often more accurate than using differential weights; and decisions can sometimes be improved by discarding relevant information. All findings relate to the apparently difficult-to-accept idea that simple models can predict complex phenomena better than complex ones. It is true that there is a scientific market place for ideas. However, like its economic counterpart, it is subject to inefficiencies (e.g., thinness, asymmetric information, and speculative bubbles). Unfortunately, the market is only "correct" in the long-run. The road to enlightenment is bumpy.
Keywords: Decision making, judgment, forecasting , linear models, heuristics
JEL Classification: D81, M10
Suggested Citation: Suggested Citation