The Wisdom of the Inner Crowd in Three Large Natural Experiments

Nature Human Behaviour, Vol. 2, No. 1, pp. 21-26, January 2018

47 Pages Posted: 12 Jan 2018 Last revised: 1 May 2018

See all articles by Dennie van Dolder

Dennie van Dolder

VU Amsterdam - School of Business and Economics; Centre for Decision Research and Experimental Economics (CeDEx) - University of Nottingham

Martijn J. van den Assem

VU Amsterdam - School of Business and Economics

Date Written: January 9, 2018

Abstract

The quality of decisions depends on the accuracy of estimates of relevant quantities. According to the wisdom of crowds principle, accurate estimates can be obtained by combining the judgements of different individuals. This principle has been successfully applied to improve, for example, economic forecasts, medical judgements and meteorological predictions. Unfortunately, there are many situations in which it is infeasible to collect judgements of others. Recent research proposes that a similar principle applies to repeated judgements from the same person. This paper tests this promising approach on a large scale in a real-world context. Using proprietary data comprising 1.2 million observations from three incentivized guessing competitions, we find that within-person aggregation indeed improves accuracy and that the method works better when there is a time delay between subsequent judgements. However, the benefit pales against that of between-person aggregation: the average of a large number of judgements from the same person is barely better than the average of two judgements from different people.

Keywords: wisdom of crowds, wisdom of the inner crowd, collective intelligence, forecasting

JEL Classification: D80

Suggested Citation

van Dolder, Dennie and van den Assem, Martijn J., The Wisdom of the Inner Crowd in Three Large Natural Experiments (January 9, 2018). Nature Human Behaviour, Vol. 2, No. 1, pp. 21-26, January 2018. Available at SSRN: https://ssrn.com/abstract=3099179

Dennie Van Dolder (Contact Author)

VU Amsterdam - School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Centre for Decision Research and Experimental Economics (CeDEx) - University of Nottingham ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Martijn J. Van den Assem

VU Amsterdam - School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

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