A new research paper by the University of Pennsylvania entitled Wise Teamwork: Collective Confidence Calibration Predicts the Effectiveness of Group Discussion reveals that sometimes the crowd can be unjustifiably confident. The paper explains that the composition of a given group is critical to achieving good results.
Key takeaway: When assembling teams, you need to have not only talented or knowledgeable people, but also people who recognise what they know and what they don’t. Basically, you need self-aware people.
When people talk, crowd wisdom can fail
We tend to trust the wisdom of crowds because it stems from a pool of judgments of individual people. Often this leads to greater accuracy. If you pose a difficult question to a group of independent people, nearly all of them will give you a wrong answer. However, on aggregate, they will often get it wrong in ways that are unbiased and uncorrelated. Therefore, on average, in the end, their individual errors cancel out.
However, it was found that if the crowd engages in conversations, the accuracy may suffer.
Why is this so? When you allow people in a group to talk to one another, their errors become correlated. Individuals may listen to one another but they don't always pay attention to the person who is best informed. Some people are able to persuade others even if they don’t possess the necessary knowledge.
In the end prevailing views will prevail
When it comes to discussions, there are also other biases. Groups usually listen more to ideas that are held more broadly, so the unique expertise of specific individuals will not be given enough weight. Thus individuals with unique and helpful ideas may end up being ignored.
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