Stock Prices: Are Intuitive or Deliberate Persons Better Forecasters?

Title: Stock Prices: Are Intuitive or Deliberate Persons Better Forecasters?
Issue: Vol. 8, No 4, 2015
Published date: 20-12-2015 (print) / 20-12-2015 (online)
Journal: Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Authors: Tobias Endress
Tony Gear
Keywords: Forecasting, decision-making, financial economics, equity predictions, stock trading
DOI: 10.14254/2071-789X.2015/8-4/3
Language: English
Pages: 43-50 (8)
JEL classification: D70, G11, G17, M51

When it comes to financial decision-making like predicting stock price movements, it would be conceivable that rational people had an advantage over intuitive people. An experiment was conducted to test this hypothesis. Participants of the experiment provided repeated estimates for different shares and it was expected that rational people would end up with more ‘correct’ answers than intuitive people. Additionally, all participants of the experiment (N=59) completed a PID scale questionnaire (Betsch, 2004; Schunk & Betsch, 2006) to evaluate their preferences for deliberate or intuitive decision-making. The PID scale provided four categories to group people according to their preferences. In summary, it was concluded that intuitive people were slightly, but not significantly, better with financial decision- making than were rational people. A higher significance was observed from a direct comparison of the four PID categories. Predictions of PID-S-plus participants were significantly more accurate.