Events calendar

11.00 - 12.30 Thursday 4 Apr 2013

On campus - London - United Kingdom

OB Seminar Series: Professor Rick Larrick

Speaker(s):

"The Wisdom of Small Crowds"

The “Wisdom of Crowds” is a well-known phenomenon in which an average of many opinions (the crowd) outperforms many of the more accurate individuals within the crowd. In our past work (Soll & Larrick, 2009; Larrick, Mannes, & Soll, 2012), we have shown that people are often skeptical of averaging opinions, and prefer to “chase the expert” instead by adopting the opinion of a single perceived expert. In doing so people often miss out on the benefits of aggregation. Although the signature finding in the groups literature is that averaging beats chasing, the latter can perform well when crowd members differ greatly in their ability. To be effective, a decision maker who chases the expert must identify one of the better judges within this context. In the present research we examine a middle strategy that averages the opinions of five top experts who are drawn from the whole crowd based on limited, imperfect cues (such as a small sample of recent performance). Our results suggest the following prescription: Rank experts based on their recent performance, and then average the opinions of the top five. This “small crowd” strategy is both effective and psychologically appealing.

Event location

LT2

Contact: Patti Luong - Email: pluong@london.edu Tel: 02070008912
Kate Lewis - Email: klewis@london.edu Tel: 02070008911