Researchers have shown that a group made up entirely of high-performing individuals can often do worse than more diverse groups, those that contain some high performers and some low performers. Diverse personalities make groups or crowds more effective decision-maker.

Complex group decisions

Suppose that you bring a group of 12 people into a room and they have to communicate with each other and reach an aggregate decision. For the moment the specific decision doesn’t matter but you can think about this example is a group of jurors debating guilt or innocence a set of marketing executives arguing about an advertising campaign or what ever fits your interests.

This is a complex example because there are so many factors that influence group decision-making: what knowledge each person brings to the decision, whether people share similar or different personalities, whether and how they communicate and so forth. What factors would predict whether this group makes a good or bad decision?

High-performer groups, worse than diverse groups

Let’s first think about knowledge. It seems obvious that knowledge is a good thing, our ideal group should be composed of knowledgeable high-performing people. That is, we should form our group from a set of people who would be pretty good at the task individually, but that’s not necessarily a good idea.

Researchers have shown that a group made up entirely of high-performing individuals can often do worse than more diverse groups, those that contain some high performers and some low performers. That’s because individuals in the diverse groups are more likely to approach the decision in different ways so that the group becomes more effective as it gets larger.

Different personality groups will make better decisions

Let’s next think about personality. It might also seem obvious that we want to group of people who are generally similar in personality. But, that’s not a good idea either groups whose members different personality will make better decisions on average in groups whose members have more similar personalities. Part of the explanation comes from group dynamics groups with diverse personalities are more likely to challenge each other in discussions.

But personality is helpful even when people can’t interact, researchers took several hundred people gave them the most common personality survey and then asked them to estimate the probabilities that specific teams win games in the upcoming World Cup Soccer Tournament. After they collected data from everyone they then constructed virtual two-person groups by taking each person and pairing them with the person whose personality was most dissimilar.

The average estimates from pairs of dissimilar people were much more accurate than estimates from pairs of people with similar personalities, they were also more accurate than random pairs of people and more accurate than estimates given by individuals our personality can predict. Albeit perfectible some aspect of how we approach decision problems. Thus, diverse personalities make groups or crowds more effective decision-maker.

Social influencers can disrupt the wisdom of crowds

Let’s also think about communication. You might think the crowds make the best decisions when people can talk to each other when people who know a lot can influence those who don’t, but that’s wrong. In some ways communication at the wrong time is the enemy of good decision-making . Social influencer communication before making decisions can disrupt the wisdom of crowds.

To provide an intuitive imagine that you are sitting in the middle of a large theater filled with people. Visible on the stage in front of you are a large barrel filled with marbles and a microphone on a stand. The host walks to the microphone and asks the members of the crowd to each guest how many marbles are in the barrel.

The median, not the average

Based on the example so far you should expect that different people would make very different guesses, but that the median guess of the crowd would tend to be better than that of any random individual. We get the standard wisdom of crowds effect if everyone answered independently.

But suppose that the host invited one audience member up to the stage and of that audience member looked at the barrel stepped to the microphone and said there are 10,000 marbles in the barrel, then she proceeded to explain the reasoning. What do you think would happen to the crowds guesses?

They’d become more correlated that first public guess of 10,000 marbles would serve as an anchor remember that heuristic and people would adjust their own guesses up or down from that anchor. So communication from a few prominent individuals in advance of decisions can reduce the diversity of the crowd and potentially introduce bias.

In real-world judgments the wisdom of the crowd can be systematically biased in a similar manner, by media reports by very salient news events by the opinions of a few decision-makers. What’s particularly striking is that people often become more confident when they are exposed to less diverse information.

Uninformed people can help removing bias

There’s a surprising potential solution though researchers have shown that uninformed people can actually help stem the tide of bias communication. To return to the theater example imagine that half of the audience was outside in the lobby for the first public guess a 10,000 marbles.

When those people return to their seats they chat with those around they didn’t hear the initial guess so their reasoning hasn’t been influenced and it helps those around them think more clearly about the problem. So, the key contributor to the wisdom of crowds is diversity and any factors that undermine diversity can also undermine the wisdom of crowds.

I want now to move to a more very specific limitation. It’s easy to get caught up in the power of crowd decisions and to lose sight of when crowds fail. Let’s think back to the article, to the French studio audience of who wants to be a millionaire. That audience led the contestant astray, by telling him that the sun rotates around the earth.

In this case the crowd failed from the contestants perspective because a good fraction of the studio audience had a shared and unexpected bias, they wanted him to lose. Crowds fail when they have a shared error in judgment and when that’s the case there’s a deeper problem the people who are most confident about their decisions are often the most wrong.