Financial Forecasting in the Lab and the Field: Qualified Professionals vs. Smart Students

ISER DP No. 1156, 2022

69 Pages Posted: 9 Mar 2022

See all articles by Te Bao

Te Bao

Nanyang Technological University (NTU) - Division of Economics

Brice Corgnet

Chapman University - Economic Science Institute; Chapman University - The George L. Argyros School of Business & Economics

Nobuyuki Hanaki

Osaka University - Institute of Social and Economic Research

Katsuhiko Okada

Kwansei Gakuin University Business School

Yohanes E. Riyanto

Nanyang Technological University (NTU) - Division of Economics

Jiahua Zhu

Ma Yinchu School of Economics

Date Written: January 5, 2022

Abstract

We compare the performance of financial professionals (CFAs) with university students in four financial forecasting tasks ranging from simple lab prediction tasks to longitudinal field tasks. Although students and professionals performed similarly in the artificial forecasting tasks, their performance differed in the more realistic tasks. Yet, increasing the ‘representativeness of the situation’ in the lab tasks did not systematically benefit financial professionals as students outperformed CFAs when forecasting historical series. However, professionals outperformed students in the field task. Our results imply that the expertise of financial professionals might have been underestimated in previous works that focused on lab tasks.

Keywords: Financial Forecasting, Financial Professionals, Financial Literacy, Cognitive Skills

JEL Classification: C91, C93, G17, D91, G41

Suggested Citation

Bao, Te and Corgnet, Brice and Hanaki, Nobuyuki and Okada, Katsuhiko and Riyanto, Yohanes E. and Zhu, Jiahua, Financial Forecasting in the Lab and the Field: Qualified Professionals vs. Smart Students (January 5, 2022). ISER DP No. 1156, 2022, Available at SSRN: https://ssrn.com/abstract=4002140 or http://dx.doi.org/10.2139/ssrn.4002140

Te Bao

Nanyang Technological University (NTU) - Division of Economics ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

Brice Corgnet

Chapman University - Economic Science Institute ( email )

One University Dr.
Orange, CA 92866
United States

Chapman University - The George L. Argyros School of Business & Economics ( email )

One University Dr.
Orange, CA 92866
United States

Nobuyuki Hanaki (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

6-1, Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Katsuhiko Okada

Kwansei Gakuin University Business School ( email )

1-1-155, Uegahara, Nishinomiya
Hyogo, 669-1337
Japan
1798546377 (Phone)

HOME PAGE: http://www.kwansei-ac.jp/iba/index.html

Yohanes E. Riyanto

Nanyang Technological University (NTU) - Division of Economics ( email )

HSS 04-53, 14 Nanyang Drive
Singapore, 639798
Singapore

Jiahua Zhu

Ma Yinchu School of Economics ( email )

92, Weijin Road
Nankai District
Tianjin, Tianjin 300072
China

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