Log on to Facebook or Twitter any time of day, and you’ll find a familiar scene: people asking questions. “In a book rut – can anyone recommend a good novel?” “Boyfriend and I had a fight – should I dump him?” or “Am shopping for a newsuit — which color would look best on me?”
Social media has made it easier than ever before to ask questions of our friends, acquaintances, and other contacts. In some ways this is a good thing because we have more information to weigh, analyze, and consider before we make a decision. But in other ways, all this information and all these opinions can result in cognitive overload. It’s like going into the cereal aisle at the grocery store for every single decision.
Policy makers, the press, and others are increasingly turning to forecasting topredict things like gas and housing prices. And when choosing which forecasts to trust, it would seem perfectly logical to turn to individuals who have been accurate in the past. But based on research I helped conduct, this turns out not to be the case.
Instead, we find that forecasts are more accurate when they are drawn from large and diverse groups, even if some individual members of that group have been wrong before.
That’s because the larger the group, the greater the inputs as well as the likelihood that wrong pieces of information will cancel each other out. Read More »