Judgmental Forecasting: Cognitive Reflection and Decision Speed

This research analyzes how individual differences affect performance in time-series forecasting. Task performance varies based on an individual’s ability to balance intuitive judgment with cognitive deliberation, as measured by the Cognitive Reflection Test. Decision makers with higher cognitive reflection tend to have lower forecast errors, and this result holds when controlling for individual intelligence. Additionally, forecast errors tend to increase when decisions are either very fast or very slow. We provide some evidence that by manipulating decision speed we can influence forecasting performance such that it deteriorates if forecasters are forced to make overly fast or overly slow decisions.