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Crowd Wisdom Relies on Agents’ Ability in Small Groups with a Voting Aggregation Rule
Department of Sociology, Ludwig Maximilians University Munich, 80801 Munich, Germany.
Department of Sociology, Ludwig Maximilians University Munich, 80801 Munich, Germany.
2016 (English)In: Management science, ISSN 0025-1909, E-ISSN 1526-5501Article in journal (Refereed) Epub ahead of print
Abstract [en]

In the last decade, interest in the “wisdom of crowds” effect has gained momentum in both organizationalresearch and corporate practice. Crowd wisdom relies on the aggregation of independent judgments. Theaccuracy of a group’s aggregate prediction rises with the number, ability, and diversity of its members. Weinvestigate these variables’ relative importance for collective prediction using agent-based simulation. We replicatethe “diversity trumps ability” proposition for large groups, showing that samples of heterogeneous agentsoutperform same-sized homogeneous teams of high ability. In groups smaller than approximately 16 members,however, the effects of group composition depend on the social decision function employed: diversity is key onlyin continuous estimation tasks (averaging) and much less important in discrete choice tasks (voting), in whichagents’ individual abilities remain crucial. Thus, strategies to improve collective decision making must adapt to thepredictive situation at hand.

Place, publisher, year, edition, pages
Institute for Operations Research and the Management Sciences (INFORMS), 2016.
Keyword [en]
wisdom of crowds, voting, social choice, diversity
National Category
Economics Business Administration
Identifiers
URN: urn:nbn:se:liu:diva-126947DOI: 10.1287/mnsc.2015.2364OAI: oai:DiVA.org:liu-126947DiVA: diva2:917948
Available from: 2016-04-08 Created: 2016-04-08 Last updated: 2016-05-31

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The full text will be freely available from 2017-04-16 13:08
Available from 2017-04-16 13:08

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