Hit-or-Miss: What Leads Decision Makers to Take Advice for Long Term Judgments?

Abstract

When decision makers face crucial strategic decisions they frequently have to rely on judgments about events in the far future. These judgments are typically characterized by very high uncertainty and the absence of experience from previous good or bad judgments. Judgments of other experts are oftentimes an important - sometimes the only - source of additional information to reduce uncertainty and improve judgment accuracy. However, decision makers have very limited means to evaluate the quality of such "advice" from other experts and could tend to ignore this valid source of information. In this paper we study what leads decision makers to take advice from an expert panel when judging the probability of far future events with high economic impact. Our analysis is based on a unique dataset that comprises more than 15,000 advice taking decisions made by almost 1,000 experts from different industries. We find that decision makers' general tendency to ignore advice is particularly strong in the domain of long term judgments and pronounces even further when conflicts in terms of beliefs, past experiences, or desires arise.