Tobias Endress

University of Gloucestershire, Cheltenham, United Kingdom,

TobiasEndress@connect.glos.ac.uk

STOCK PRICES: ARE INTUITIVE OR DELIBERATE PERSONS BETTER

FORECASTERS?

Tony Gear

University of Gloucestershire, Cheltenham, United Kingdom

Abstract. 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.

Received: June, 2015

1st Revision: October, 2015

Accepted: December, 2015

DOI: 10.14254/2071-789X.2015/8-4/3

JEL Classification: D70, G11, G17, M51

Keywords: Forecasting,  decision-making,  financial  economics, equity predictions, stock trading.