Marketing Papers

Document Type

Journal Article

Date of this Version

December 1994


We hypothesized that multiplicative decomposition would improve accuracy only in certain conditions. In particular, we expected it to help for problems involving extreme and uncertain values. We first reanalyzed results from two published studies. Decomposition improved accuracy for nine problems that involved extreme and uncertain values, but for six problems with target values that were not extreme and uncertain, decomposition was not more accurate. Next, we conducted experiments involving 10 problems with 280 subjects making 1,078 estimates. As hypothesized, decomposition improved accuracy when the problem involved the estimation of extreme and uncertain values. Otherwise, decomposition often produced less accurate prediction.


Postprint version. Published in International Journal of Forecasting, Volume 10, Issue 4, December 1994, pages 495-506.
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decision analysis, estimation, extreme values, forecasting, multiplicative



Date Posted: 18 June 2007

This document has been peer reviewed.