Wisdom of the Crowd and its Implications
The article “The Right Way to Use the Wisdom of Crowds” highlights several studies that were conducted in order to understand the “wisdom of the crowd” phenomenon in terms of decision making and teamwork. The article states, “Evidence suggests that the combination of multiple, independent judgments is often more accurate than even an expert’s individual judgment.” However, the article then proceeds to go into detail concerning the limitations of independent judgments in workspaces. When an individual forms his or her own opinion before the team comes together to form a consensus, this can often result in tension within the group.
The first study to test this claim asked parents to estimate the total cost of raising a child in the United States, and then compare their estimate with that of “another parent”, which was actually the estimate curated by financial experts. The test subjects were randomly assigned to either form their own estimate then judge another, or vice versa. The study found that “parents who first made their own estimate were 22% less likely to think that the other estimate was at least ‘moderately likely to be correct’ than were parents who evaluated the other estimate before making their own.” Additionally, there was no variance in this trend among differences in gender, age, or expertise.
The second study repeated a similar experiment, but this time with a more qualitative probing question: national security experts were asked to come up with a security strategy concerning a hostage-rescue situation. Again, the experts who formed their own opinion first offered lower evaluations of the other peer’s strategy; moreover, they also made more negative inferences about the other peer’s intelligence. Thus, individuals seemed to think that if their answer differed largely from the other person’s answer, the other individual must be wrong and therefore less intelligent. However, if they first evaluated the other person’s opinion, they were more likely to consider the same answer and agree with it. The article describes the “social costs” that may result from an individual forming their own opinions first, such as becoming inflexible with other people’s suggestions. Thus, in order to make better decisions as a group, the author suggests that groups should also “pre-commit to a strategy for combining their opinions”. This can help to alleviate the negative consequence of sharing other opinions while one has already formed one of their own.
The article highlights the importance of decision making when it comes to teamwork, such as working on a team within a company. This article reminded me of information cascades, and the urn example we walked through in class. While each individual has access to their own private information, their opinion, they are only able to hear what other people say out loud to the group, which may or may not be their actual true opinion. Thus, if one person starts the discussion with a certain opinion, it may be the case that everyone therefore simply mimics the same opinion, as they do not want to differ largely from the group and be considered “wrong”. Thus, an information cascade begins. In order to combat the information cascade, each team member can form their own opinions first, which has several implications as discussed in the article. Thus, there seems to be a tradeoff between starting an information cascade and making sure every opinion is heard. This is important to think about in the context of project teams and successful decision making.
Source Title: “The Right Way to Use the Wisdom of Crowds”; Author: Brad DeWees and Julia A. Minson; Website: Harvard Business Review
Link: https://hbr.org/2018/12/the-right-way-to-use-the-wisdom-of-crowds