Abstract:
The “wisdom of the crowd” effect is the finding that the average estimate of a group can be more accurate than the estimate of an expert. This study discovered that even mild social influence can undermine the wisdom of the crowd effect in simple estimation tasks.
To design the study, the researchers asked 144 participants to answer some simple estimation questions about demographics and crime statistics in Switzerland, with a financial incentive for accurate estimates.
Over five consecutive rounds, the participants were then asked to create new estimates after being given some information about the estimates of other participants.
Key Points:
Takeaway:
Social influence tends to reduce the accuracy of human decision-making.