Expert, Linear Models, and Nonlinear Models of Expert Decision Making in Bankruptcy Prediction: A Lens Model Analysis.

Author List: Kim, Choong Nyoung; Jr., Raymond McLeod;

Journal of Management Information Systems, 1999, Volume 16, Issue 1, Page 189-206.

Analysis of human judgment and decision making provides useful methodologies for examining the human decision process and substantive results. One such methodology is a lens model analysis. The authors used such a model to study how well a model of expert decisions can capture a valid strategy in the decision process. The study also addresses whether a model of an expert can be more accurate than the expert. The predictive accuracy (predictive validity) of two linear (statistical) models and two nonlinear models of human experts is compared. The results indicate that nonlinear models can capture factors (valid nonlinear strategy) that contribute to the experts' predictive accuracy. However, linear models cannot capture the valid nonlinear strategy as well as nonlinear models. One linear model and two nonlinear models performed as well as the overall average of a group of experts. However, all of the models were outperformed by the most accurate expert. By combining validity of decision strategy with characteristics of modeling algorithms, it is possible to explain why certain algorithms perform better than others.

Keywords: decision strategy; human expert; inductive learning; lens model; linear model; nonlinear model; predictive validity

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List of Topics

#226	0.291	models linear heterogeneity path nonlinear forecasting unobserved alternative modeling methods different dependence paths efficient distribution probabilities demonstrate observed heterogeneous probability
#129	0.153	expert systems knowledge knowledge-based human intelligent experts paper problem acquisition base used expertise intelligence domain inductive rules machine artificial task
#191	0.145	model models process analysis paper management support used environment decision provides based develop use using help literature mathematical presented formulation
#215	0.123	data classification statistical regression mining models neural methods using analysis techniques performance predictive networks accuracy method variables prediction problem measure
#10	0.117	strategies strategy based effort paper different findings approach suggest useful choice specific attributes explain effective affect employ particular online control
#177	0.080	decision accuracy aid aids prediction experiment effects accurate support making preferences interaction judgment hybrid perceptual strategy account context restrictiveness taking