What is the 'Delphi Method'

The Delphi method is a forecasting method based on the results of questionnaires sent to a panel of experts. Several rounds of questionnaires are sent out, and the anonymous responses are aggregated and shared with the group after each round. The experts are allowed to adjust their answers in subsequent rounds. Since multiple rounds of questions are asked and the panel is told what the group thinks as a whole, the Delphi method seeks to reach the correct response through consensus.

BREAKING DOWN 'Delphi Method'

The Delphi method was originally conceived in the 1950s by Olaf Helmer and Norman Dalkey of the Rand Corporation. The name refers to the Oracle of Delphi, a priestess at a temple of Apollo in ancient Greece known for her prophecies. The Delphi method allows experts to work towards a mutual agreement by conducting a circulating series of questionnaires and releasing related feedback to further the discussion with each subsequent round. The experts' responses shift as rounds are completed based on the information brought forth by other experts participating in the analysis.

Using the Delphi Method

First, the group facilitator selects a group of experts based on the topic being examined. Once all participants are confirmed, each member of the group is sent a questionnaire with the instructions to comment on each topic based on their personal opinion, experience or previous research. The questionnaires are returned to the facilitator who groups the comments and prepares copies of the information. A copy of the compiled comments is sent to each participant, along with the opportunity to comment further.

At the end of each comment session, all questionnaires are returned to the facilitator who decides if another round is necessary or if the results are ready for publishing. The questionnaire rounds can be repeated as many times as necessary to achieve a general sense of consensus.

Benefits of the Delphi Method

The Delphi method seeks to aggregate opinions from a diverse set of experts, and it can be done without having to bring everyone together for a physical meeting. Since the responses of the participants are anonymous, individual panelists don't have to worry about repercussions for their opinions. Consensus can be reached over time as opinions are swayed.

Disadvantages of the Delphi Method

While the Delphi method allows for commentary from a diverse group of participants, it does not result in the same sort of interactions as a live discussion. Response times can be long ,which slows the rate of discussion. It is also possible that the information received back from the experts will provide no innate value.

RELATED TERMS
  1. Series A Financing

    Series A financing is the first round of financing undergone ...
  2. Rounding Top

    A rounding top is a chart pattern used in technical analysis ...
  3. Alphabet Rounds

    Alphabet rounds are the first rounds of financing for a startup ...
  4. Average Cost Method

    The average cost method is an inventory costing method in which ...
  5. Average Cost Basis Method

    The average cost basis method is a system of calculating the ...
  6. Adjusted Balance Method

    The adjusted balance method is a method of accounting for financing ...
Related Articles
  1. Financial Advisor

    Risk Tolerance: Why Advisors, Investors Mess It Up

    Quantifying the amount of risk that a client is willing to take can be a deceptively difficult task. Here's why.
  2. Investing

    Intel Scores a Major Self-Driving Car Win

    Though the "PC is dead" mantra that has been bandied about in the tech world over the past year or two isn't quite true, Intel (NASDAQ: INTC) CEO Brian Krzanich recognizes that his company's ...
  3. Tech

    Robo-Advisors Face Regulatory Scrutiny

    FINRA and other regulators are starting to put robo-advisors under a microscope. Here's what they are focusing on.
  4. Personal Finance

    What Do Financial Advisors Do?

    Just what does a financial advisor do? A lot, in fact. And any potential client should do their due diligence and come prepared with questions.
  5. Financial Advisor

    Roth IRA Scams: What to Watch Out For

    Here’s what you need to watch out for when it comes to investment and business opportunities using Roth IRAs.
  6. Investing

    6 Stocks for the Electric Car Boom Not Named Tesla

    As the electric car market picks up speed, it's not just the automakers that will benefit.
  7. Investing

    How to choose the best stock valuation method

    There are many valuation methods available to investors, each with unique characteristics. Here, we'll explore the most common valuation methods – and when to use them.
  8. Investing

    Introduction To Bonds

    Find out how this method of debt investment is used to finance various levels of government and private companies.
  9. Personal Finance

    10 Frustrating Things Standing Between You and Your Mortgage

    If you know about the common challenges ahead of time, you can be prepared for them, and in some cases, even avoid them.
  10. Investing

    Accounting For Differences in Oil and Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
RELATED FAQS
  1. What are the differences between percentage of completion and the completed contract ...

    Learn the advantages and disadvantages businesses face when using either the percentage-of-completion or completed contract ... Read Answer >>
  2. What are the differences between the installment method and percentage of completion ...

    Learn how businesses recognize revenues and report them under the installment method and percentage-of-completion method, ... Read Answer >>
  3. How much more will it cost me to buy an odd lot of shares?

    A round lot is a predetermined number of shares of stock - usually 100 shares, while an odd lot refers to any number of shares ... Read Answer >>
  4. How are labor demand forecasts made in human resources planning?

    Discover how human resource planning might be used to estimate the correct demand for labor in a given market, both qualitatively ... Read Answer >>
  5. What are the main methods for calculating business costs?

    See why different economic actors use different methods for calculating costs, and learn how different methods can impact ... Read Answer >>
Hot Definitions
  1. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...
  2. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  3. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  4. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
Trading Center