Open AccessDecision Makers' Ability To Identify Unusual Costs And Implications For Alternative Estimation Procedures
Author(s) -
MaryAnne Atkinson,
Scott K. Jones
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v7i4.6201
Subject(s) - weighting , outlier , econometrics , ordinary least squares , set (abstract data type) , computer science , data set , function (biology) , estimation , statistics , data mining , mathematics , artificial intelligence , economics , medicine , management , evolutionary biology , biology , radiology , programming language
This paper reports the results of an experiment in which individuals visually fitted a cost function to data. The inclusion or omission of unusual data points within the data set was experimentally manipulated. The results indicate that individuals omit outliers from their visual fits, but do not omit influential points. Evidence also suggests that the weighting rule used by individuals is more robust that the weighting rule used in the ordinary least squares criterion.