The Impact of Joint Versus Separate Prediction Mode on Forecasting Accuracy

25 Pages Posted: 3 Oct 2022

See all articles by Alex Imas

Alex Imas

University of Chicago - Booth School of Business

Minah Jung

New York University (NYU) - Department of Marketing

Silvia Saccardo

Carnegie Mellon University, Department of Social and Decision Sciences

Joachim Vosgerau

Bocconi University

Date Written: October 1, 2022

Abstract

Forecasters predicting how people change their behavior in response to a treatment or intervention often consider a set of alternatives. In contrast, those who are treated are typically exposed to only one of the treatment alternatives. For example, managers considering a wage schedule consider a set of alternative wages while employees are hired at a given rate. We show that forecasts made in joint-prediction mode—which considers a set of alternatives—generate substantially larger response predictions than those made in separate-prediction mode—which considers the response to only one treatment realization in isolation. Results show the latter to be more accurate in matching people’s actual responses to interventions and treatment changes. We present applications to managerial decision-making and forecasting of scientific results.

Keywords: Forecasting Accuracy, Joint vs. Separate Evaluation, Behavioral Economics

Suggested Citation

Imas, Alex and Jung, Minah and Saccardo, Silvia and Vosgerau, Joachim, The Impact of Joint Versus Separate Prediction Mode on Forecasting Accuracy (October 1, 2022). Available at SSRN: https://ssrn.com/abstract=4234803 or http://dx.doi.org/10.2139/ssrn.4234803

Alex Imas

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Minah Jung

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Silvia Saccardo (Contact Author)

Carnegie Mellon University, Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States

Joachim Vosgerau

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
37
Abstract Views
166
PlumX Metrics