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

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  • Te Bao
  • Brice Corgnet
  • Nobuyuki Hanaki
  • Katsuhiko Okada
  • Yohanes E. Riyanto
  • Jiahua Zhu

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 prediction tasks. Although students and professionals performed similarly in the most artificial forecasting tasks, CFAs outperformed students in the field predictions. Differences in forecasting performance between finance professionals and students were explained by financial literacy, not cognitive ability.
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Suggested Citation

  • Te Bao & Brice Corgnet & Nobuyuki Hanaki & Katsuhiko Okada & Yohanes E. Riyanto & Jiahua Zhu, 2022. "Financial Forecasting in the Lab and the Field: Qualified Professionals vs. Smart Students," ISER Discussion Paper 1156, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:1156
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    Cited by:

    1. Bao, Te & Corgnet, Brice & Hanaki, Nobuyuki & Riyanto, Yohanes E. & Zhu, Jiahua, 2023. "Predicting the unpredictable: New experimental evidence on forecasting random walks," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
    2. Tiffany Tsz Kwan TSE & Nobuyuki HANAKI & Bolin MAO, 2022. "Beware the performance of an algorithm before relying on it: Evidence from a stock price forecasting experiment," ISER Discussion Paper 1194r, Institute of Social and Economic Research, The University of Osaka, revised Mar 2024.
    3. Tse, Tiffany Tsz Kwan & Hanaki, Nobuyuki & Mao, Bolin, 2024. "Beware the performance of an algorithm before relying on it: Evidence from a stock price forecasting experiment," Journal of Economic Psychology, Elsevier, vol. 102(C).
    4. Bao, Te & Füllbrunn, Sascha & Pei, Jiaoying & Zong, Jichuan, 2024. "Reading the market? Expectation coordination and theory of mind," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 510-527.

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