Lamprecht, John
(2023)
EVALUATING THE POSSIBILITY OF USING CONSENSUS METAL PRICE FORECASTS IN THE NATURAL RESOURCE INDUSTRY.
Doctor of Business Administration thesis, University of Liverpool.
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Abstract
The action research project, structured as a cooperative inquiry, examined whether the reliability of metal price forecasting could be improved using a collective decision-making approach. Forecasting metal prices is a crucial practice for natural resource organizations that can impact their sustainability. The usual practice is for an organization to make metal price forecasts in isolation without the certainty that their predictions will be reliable. Prior research has advocated using a collective approach for determining a consensus outcome that captures the diversity of insights. As a collective decision-making approach, the Delphi Method uses an anonymous deliberation process, and usually, the consensus average is communicated through a moderator to surface a consensus over several cycles. Based on the Delphi Method, a cooperative inquiry as a case study approach was used to collect the metal price forecasts and supporting justifications from invited participants on a panel website that allowed asynchronous interactions. Secondary gold price forecasts were sourced from London Bullion Market Association's annual precious metals survey between 2000 and 2020 to triangulate with the panel data collected. Collective decision-making can be divided into two elements, participation and aggregation. Participation deals with who is involved and how they interact to make the collective decision. Two generic methods can be identified, deliberation and collaboration. Deliberation combines participants' views to determine a consensus outcome that reflects the majority preference. Collaboration is more encompassing, aiming to share participants' insights and surface a consensus outcome that incorporates the prior insights and those that emerge from the participants' interactions. Aggregation, the second element in collective decision-making, concerns how the collective consensus outcome is determined. The common practice is to use the statistical average or median as representative of the majority view. As seen in prediction markets, an alternative aggregation method is the market price mechanism to determine the outcome. All the metal price forecasts sourced were analyzed quantitatively to evaluate the reliability of an individual participant compared to the consensus median. The forecasters' justifications from the two data sources were qualitatively analyzed to examine if keywords could be used to identify reliable forecasts. The outcome of the quantitative analysis was neither an individual nor the consensus median was consistently a reliable forecast. Depending on the market metal price direction, for declining metal prices, the lower quartile, and rising metal prices, the upper quartile represented a more reliable aggregated consensus estimate. The qualitative analysis from both forecasting forums showed a poor relationship with forecasting reliability. The keyword usage among forecasters was high, indicating the use of common justification for the forecast made. In evaluating the outcome reliability of the cooperative inquiry, the possibility of structuring the forecaster's inputs metal price and keywords as probabilities were proposed. Given the importance of correctly predicting the future metal price direction, it is recommended to focus the explanations provided on the anticipated market price direction. Reciprocity was identified as an essential motivation for obtaining participation and continued contributions from participants and is a factor to consider in future related research.
| Item Type: | Thesis (Doctor of Business Administration) |
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| Divisions: | Faculty of Humanities and Social Sciences > School of Management |
| Depositing User: | Symplectic Admin |
| Date Deposited: | 14 Aug 2023 09:56 |
| Last Modified: | 14 Aug 2023 09:57 |
| DOI: | 10.17638/03169571 |
| Supervisors: |
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| URI: | https://livrepository.liverpool.ac.uk/id/eprint/3169571 |
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