Social Influence Undermines the Wisdom of the Crowd in Sequential Decision Making

Abstract

Teams, juries, electorates, and committees must often select from various alternative courses of action what they judge to be the best option. The phenomenon that the central tendency of many independent estimates is often quite accurate—“the wisdom of the crowd”—suggests that group decisions based on plurality voting can be surprisingly wise. Recent experimental studies demonstrate that the wisdom of the crowd is further enhanced if individuals have the opportunity to revise their votes in response to the independent votes of others. We argue that this positive effect of social information turns negative if group members do not first contribute an independent vote but instead cast their votes sequentially such that early mistakes can cascade across strings of decision makers. Results from a laboratory experiment confirm that when subjects sequentially state which of two answers they deem correct, majorities are more often wrong when subjects can see how often the two answers have been chosen by previous subjects than when they cannot. As predicted by our theoretical model, this happens even though subjects’ use of social information improves the accuracy of their individual votes. A second experiment conducted over the internet involving larger groups indicates that although early mistakes on easy tasks are eventually corrected in long enough choice sequences, for difficult tasks wrong majorities perpetuate themselves, showing no tendency to self-correct. This paper was accepted by Yuval Rottenstreich, decision analysis.

Exposure to the Views of Opposing Others with Latent Cognitive Differences Results in Social Influence—But Only When Those Differences Remain Obscured

“…Although studies such as these aim to understand how accurate predictions ultimately translate into more effective decisions (Surowiecki 2005;Matzler, Strobl, and Bailom 2016;Page 2019), accuracy does not automatically beget higher quality decisions (Becker and Smith 2021;Frey and van de Rijt 2021). Findings from the present study demonstrate the link between cognitive diversity and potentially better decisions that arise when people engage with and learn from opposing others.…”

“…The core mechanism thought to underpin this relationship is social learning: Individuals in social groups characterized by high, rather than low, levels of cognitive diversity are more likely to be exposed to novel ideas, which lead them to update their prior beliefs and embrace different points of view (Gibson and Vermeulen 2003;Aral and Van Alstyne 2011;Page 2019). Yet, in many cases, individuals fail to realize the learning benefits of group cognitive diversity (Guilbeault, Becker, and Centola 2018;Bail, Argyle, Brown, Bumpus, Chen, Hunzaker, Lee, Mann, Merhout, and Volfovsky 2018;Aral and Van Alstyne 2011;Frey and van de Rijt 2021;Toyokawa, Whalen, and Laland 2019). Why does cognitive diversity promote social learning in some contexts but fail to do so in others?…”

Optimizing voting order on sequential juries: a median voter theorem and beyond

“…The issue of when social influence (sequential rather than simultaneous voting) helps or hurts reliability has been studied in a laboratory setting by Frey and van de Rijt (2020). As opposed to the simultaneous voting scheme analyzed by Condorcet, sequential voting has advantages and disadvantages.…”

On the Quantification of Crowd Wisdom, Optimal Crowd Size, and the Mean-Median Dilemma

“…In experiments and field studies, there is a large variety of problems in which crowds and individuals decide. Many empirical studies focus on the most simple case of binary or multiple discrete choice, where a group has to find the correct decision among a finite set of options (see Galesic, Barkoczi, & Katsikopoulos, 2018;Couzin et al, 2011;Frey & Rijt, 2020;Kao & Couzin, 2014;Prelec, Seung, & McCoy, 2017). Also, many theories of epistemic democracy start from binary choice building on Condorcet's jury theorem (see List & Goodin, 2001).…”