Collective decision making reduces metacognitive control and increases error rates, particularly for overconfident individuals

Abstract

This research aimed to investigate the changes in judgment accuracy, confidence, control thresholds, and decision outcomes when people act in two‐person groups (dyads) compared with acting individually. First, we used interacting dyads to determine the metacognitive and behavioral outcomes of collective decision making and compared them with those of individuals. Second, we examined whether these changes were related to the trait‐confidence and bias of individuals working together. Using a within‐person design, undergraduate psychology students (N = 116) completed a General‐knowledge Test individually, then together as a dyad. Each question was accompanied by a confidence rating and a decision to bet $10 on the answer. Dyads had significantly higher confidence and lower control thresholds than individuals. They were also significantly more decisive (made more bets) and reckless (lost a higher rate of bets) than when working alone. Thus, we observed a higher rate of decision errors for groups than individuals. The results also demonstrated the important role of individual differences: Overconfident individuals became even more confident, decisive, and reckless when working together compared with less confident or underconfident individuals working together. These findings have important theoretical and applied implications for collective decision making; metacognitive bias and potentially control thresholds may be targeted to alleviate the larger error rates and guide the formation of more effective groups.

The cost of coordination can exceed the benefit of collaboration in performing complex tasks

“…this finding is nevertheless in line with literature that has found no pair advantage when the task context consists of general knowledge-based tests involving discrete choice decisions [55,56]. This underscores the extent to which performance greatly depends on the task context.…”

The One-Man Show: The Effect of Joint Decision-Making on Investor Overconfidence

“…A statistically significant and reliably traceable main effect on confidence rather than on knowledge seems to mirror several psychological studies that examine the impact of cooperation on overconfidence in non-financial settings (Bang et al 2017;Blanchard et al 2020;Koriat 2015;Schuldt et al 2017). It should be noted that these studies stand in contrast to the findings of Trouche, Sander, and Mercier (2014) who report an increase in objective knowledge through group discussions.…”

“…Generally, overconfident investors predict the outcomes of future endeavors to be more positive than they will be and overestimate the precision of the underlying information (Odean 2002). While most psychological studies agree with the notion of a potentially harmful bias (Blanchard, Jackson, and Kleitman 2020;Goodie 2005;Moore and Healy 2008), some studies indicate that overconfident individuals are more persuasive and are attributed to greater perceived competence and commitment in a group setting (Sah, Moore, and MacCoun 2013;Vullioud et al 2017). However, the critical question entails how joint decisionmaking influences financial overconfidence.…”

“…The previous discussion on the interplay between joint financial decision-making and investor overconfidence shows that interactive decisions primarily affect confidence rather than objective knowledge. In other words, there seems to be no notable increase in what investors know when involving others in their investment decisions (Bang et al 2017;Bialowolski et al 2020;Blanchard et al 2020;Koriat 2015;Schuldt et al 2017;Soll, Palley, and Rader 2022). Therefore, it is assumed that joint decision-making has a direct effect on confidence.…”

I Choose to Opt-Out of Answering: Individual Differences in Giving Up Behaviour on Cognitive Tests

“…The importance of examining strategically opting out of providing an answer to avoid errors (“giving up behaviour”) becomes particularly apparent when comparing research investigating metacognitive miscalibrations such as overconfidence and meta-ignorance ( Blanchard et al 2020 ; Buratti et al 2013 ; Händel et al 2020 ; Kleitman et al 2019 ; Moore and Healy 2008 ; Schlösser et al 2013 ). An individual who never gives up on any problem is bound to waste unnecessary time and cognitive resources.…”