Social groups can be remarkably smart and knowledgeable when their averaged judgements are compared with the judgements of individuals. Already Galton [Galton F (1907) Nature 75:7] found evidence that the median estimate of a group can be more accurate than estimates of experts. This wisdom of crowd effect was recently supported by examples from stock markets, political elections, and quiz shows [Surowiecki J (2004) The Wisdom of Crowds]. In contrast, we demonstrate by experimental evidence (N = 144) that even mild social influence can undermine the wisdom of crowd effect in simple estimation tasks. In the experiment, subjects could reconsider their response to factual questions after having received average or full information of the responses of other subjects. We compare subjects' convergence of estimates and improvements in accuracy over five consecutive estimation periods with a control condition, in which no information about others' responses was provided. Although groups are initially "wise," knowledge about estimates of others narrows the diversity of opinions to such an extent that it undermines the wisdom of crowd effect in three different ways. The "social influence effect" diminishes the diversity of the crowd without improvements of its collective error. The "range reduction effect" moves the position of the truth to peripheral regions of the range of estimates so that the crowd becomes less reliable in providing expertise for external observers. The "confidence effect" boosts individuals' confidence after convergence of their estimates despite lack of improved accuracy. Examples of the revealed mechanism range from misled elites to the recent global financial crisis.collective judgment | estimate aggregation | experimental social science | swarm intelligence | overconfidence

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Field experiments have shown that observing other people littering, stealing or lying can trigger own misconduct, leading to a decay of social order. However, a large extent of norm violations goes undetected. Hence, the direction of the dynamics crucially depends on actors’ beliefs regarding undetected transgressions. Because undetected transgressions are hardly measureable in the field, a laboratory experiment was developed, where the complete prevalence of norm violations, subjective beliefs about them, and their behavioral dynamics is measurable. In the experiment, subjects could lie about their monetary payoffs, estimate the extent of liars in their group and make subsequent lies contingent on information about other people’s lies. Results show that informed people who underestimate others’ lying increase own lying more than twice and those who overestimate, decrease it by more than half compared to people without information about others’ lies. This substantial interaction puts previous results into perspective, showing that information about others’ transgressions can trigger dynamics in both directions: the spreading of normative decay and restoring of norm adherence.

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Norm violations can be contagious. Previous research analyzed two mechanisms of why knowledge about others' norm violations triggers its spread: (1) actors lower their subjective beliefs about the probability or severity of punishment or (2) they condition their compliance on others' compliance. While earlier field studies could hardly disentangle both effects, we use a laboratory experiment which eliminates any punishment threat. Subjects (n = 466) can throw a die and are paid according to their reported number. Our design rules out any possibility of personal identification so that subjects can lie about their thrown number and claim inflated payoffs without risking detection. The aggregate distribution of reported payoffs allows the estimation of the extent to which the honesty norm is violated. We compare two treatment conditions in which subjects are informed about lying behavior of

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Why does the adherence to norms not prevent conflict? While the current literature focuses on the emergence, maintenance and impact of norms with regard to cooperation, the issue of norm-related conflict deserves more attention. We develop a general game theoretical model of "normative conflict" and explain how transaction failures on the macrolevel can result from cooperative motives on the microlevel. We differentiate between two kinds of conflict. The first results from distinct expectations regarding the way in which general normative obligations should be fulfilled, the second from distinct expectations as to how the norm should restrain actions based on self-interest. We demonstrate the empirical relevance of normative conflict in a version of the ultimatum game. Our data reveal widespread normative conflict among different types of actors -egoistic, equity, equality and cherry picker. Our findings demonstrate how cooperative intentions about how to divide a collectively produced good may fail to produce cooperative outcomes.Why is it that people consider our behavior improper despite our best intentions? Should norm adherence not prevent us from running into conflict? For example, why is it that well-intentioned, expensive presents are often rejected? For what reason is the offer of a seat on a bus angrily rejected by a sprightly elderly person? How to explain that getting "straight to the point" in a business meeting is often perceived as unmannerly?These everyday occurrences are puzzling given that norms of behavior are generally regarded as cohesive. Even scholars of opposing schools of thought seem to converge around the idea that social norms emerge because they have positive consequences for society. In the functionalist approach, norms bridge the tension between individual self-interest and the functional prerequisites of society (Durkheim 1997(Durkheim [1897Parsons 1937;Dahrendorf 1958). The rational choice literature studies conditions under which individuals will overcome their self-interest in order to contribute to cooperation norms in society (