Effect of scenario planning on field experts' judgment of long-range investment decisions

Abstract

We present the results of three field experiments demonstrating the effect of scenario planning on field experts' judgment of several long-range investment decisions. Our results show, contrary to past findings, that the use of multiple scenarios does not cause an aggregate increase or decrease in experts' confidence in their judgment. Rather, expert judgment changes in accordance with how an investment fares in a given scenario: it becomes more favorable if the investment is found to be useful for a particular scenario used by the expert, and vice versa. This scenario-induced change is moderated by the expert's confidence in his/her judgment before using the scenario. Finally, our results show that field experts prefer more flexible options to make specific long-range investments after using multiple scenarios.