When you ask a number of people for their best guess about something, such as a date in history, and then you average their guesses, this average will generally be more accurate than the typical person’s guess alone. This is the basis of the book, The Wisdom of Crowds by James Surowiecki (See also Wisdom of Crowds – Wikipedia) and occurs when the people involved have a diverse knowledge of the topic, and hold a range of views about it. What is happening is that the random errors between people are cancelling each other out. For the process to work well you need a diversity of such things as training, experience, and decision models; and that people form their opinions independently of one another.
Using a similar process it turns out that one person can gain a reasonable increase in accuracy by making two guesses, and then averaging them. The process requires that the person create diversity in their own head, because their accuracy doesn’t increase if they simply makes one guess and then another.
Here is the protocol researchers designed that does the trick: “First, assume that your first estimate is off the mark. Second, think about a few reasons why that could be. Which assumptions and considerations could have been wrong? Third, what do these new considerations imply?…Fourth, based on this new perspective, make a second, alternative estimate.”
Take the two guesses and average them, and the result will be about 50% of the gain you could have gotten if you had averaged your first guess with that of another person’s. It turns out that your second guess isn’t more likely to be accurate than the first, it’s just that it contains different errors, and so the average of the two guesses is likely to be more accurate. (You Know More than You Think by Jack Soll and Richard Larrick) (The Wisdom of Many in One Mind: Improving Individual Judgments With Dialectical Bootstrapping by Stefan M. Herzog and Ralph Hertwig)
There is always the risk of people falling in love with some new idea, and at the risk of being a bit silly by stating the all-to0-obvious, while I think that this decision making methodology does have a lot of merit in many cases, it has its limits, and should only be used when more certain sources of information aren’t available. Crowds can be wrong, shown in many circumstances by the clear facts that confront us. In those circumstances where more a certain sort of information is available it would be ridiculous to simply take a vote.
Tags: Decision Making, James Surowiecki, Ralph Hertwig, Stefan M. Herzog, Wisdom of Crowds