Stuck in the Wisdom of Crowds: Information, Knowledge, and Heuristics

49 Pages Posted: 14 Jul 2021

See all articles by Yunwen He

Yunwen He

Tsinghua University

Jaimie W. Lien

The Chinese University of Hong Kong (CUHK) - Department of Decision Sciences & Managerial Economics

Jie Zheng

Tsinghua University - School of Economics & Management

Multiple version iconThere are 2 versions of this paper

Date Written: July 13, 2021

Abstract

Collective knowledge is significantly affected by information about others’ viewpoints. However, under what conditions does the “wisdom of crowds” help versus harm knowledge of factual information? In this experiment, we present subjects with the task of answering 50 factual true or false trivia questions, with the potential opportunity to revise their answers after receiving different levels of information about other subjects’ answers and self-assessed confidence levels from an independent session. We find that information about others’ answers improves performance on easy questions, but tends to harm performance on difficult questions. In addition, information about answers provided by other subjects mainly improves performance for those with lower initial knowledge levels. Subjects in our Moderate-Information condition outperform those in either the Low or High-Information conditions, implying an optimal level of social information provision, in which the Majority Rule and Maximum Confidence rule complement one another. Although the Maximum Confidence rule can improve performance, yielding the lowest overall error rate out of the heuristics considered, subjects generally underutilize the information on other subjects’ confidence levels in favor of the Majority Rule heuristic. These findings shed light on possible directions for policies that can cultivate factual knowledge on online opinion platforms.

Keywords: wisdom of crowds, information provision, decision heuristics, majority rule, surprising popularity, maximum confidence

JEL Classification: C91, D81, D83

Suggested Citation

He, Yunwen and Lien, Jaimie W. and Zheng, Jie, Stuck in the Wisdom of Crowds: Information, Knowledge, and Heuristics (July 13, 2021). Available at SSRN: https://ssrn.com/abstract=3885337 or http://dx.doi.org/10.2139/ssrn.3885337

Yunwen He

Tsinghua University ( email )

Beijing
China

Jaimie W. Lien (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Decision Sciences & Managerial Economics ( email )

Shatin, N.T.
Hong Kong

Jie Zheng

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

HOME PAGE: http://jzheng.weebly.com/

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