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I'm having a hard time understanding two concepts: wisdom of crowds and group polarization, at the same time.

Wisdom of crowds states that aggregation of information or prediction, in groups, are often better than single member's.

Group polarization however, refers to the tendency that groups make more extreme decisions than single members.

It seems that group decisions, due to group polarization, should be less accurate than single member's since it's more extreme, which conflicts with the idea of wisdom of crowds. I assume there should be boundaries between two concepts and a case-by-case basis?

Any help is appreciated.

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Great question.

Wisdom of crowds happens when participants are motivated to find a "correct" answer. The classic example is counting jelly beans in a jar - where the average of guesses outperforms individual guesses. More practical applications include forecasting and prediction markets. In such contexts, aggregated forecasts / predictions outperform individuals (see Philip Tetlock's research for example). Presumably, democracy falls under this premise (with some evidence to support it), as do stock markets. Note that in this context, participants often do not make their individual decisions in group settings.

Group polarization in contrast, happens when participants are not motivated to find a correct answer. Rather, when individuals are motivated to reach group consensus, protect or build status, or satisfy some other agenda, then there is a tendency for opinions to polarize. This is common in debates (where participants are motivated to "win") and decision by committee (where the motivation is consensus). Presumably, arguments in court fall under this premise, as do parliaments. Note that in this context, participants do make their individual decisions in group settings.

Although aggregate results when participants are properly motivated tend to outperform those of badly motivated groups, this is not an inevitable outcome, and a paper by Mercier & Sperber (2011) argues that "argument" is adaptive, and can improve group decision-making under some circumstances, despite the tendency to polarize.

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  • $\begingroup$ A key factor here appears to be whether the decision involves egoistic concerns such as group- or self-esteem or status. As such, might the case of polarisation be considered a defence mechanism? $\endgroup$
    – Michael
    Commented Feb 11, 2022 at 8:00
  • $\begingroup$ Isn't there also usually an assumption that the "crowd" is a reasonable cross-section. If the crowd consists of equal numbers of liberals and conservatives, averaging the answers may cancel out the polarization and arrive near the correct answer. $\endgroup$
    – Barmar
    Commented Feb 11, 2022 at 15:53
  • $\begingroup$ @Michael Note that defence mechanisms are an outdated Freudian construct, largely superseded in research by theories such as cognitive dissonance (even in clinical psychology, it is more common to refer to cognitive distortions nowadays). Anyway, the potential motivations for polarization are fairly broad, so I wouldn't make such a sweeping statement, but certainly self-evaluation is a major factor. $\endgroup$
    – Arnon Weinberg
    Commented Feb 11, 2022 at 19:26
  • $\begingroup$ @Barmar It's possible. However, keep in mind that what liberals and conservatives typically argue about does not have a "correct" answer. In experiments where such groups are prompted to discuss questions that do have a correct answer, polarization is less likely to occur. Polarization is also less common when liberals and conservatives discuss topics with each other, than when they discuss them only between themselves. $\endgroup$
    – Arnon Weinberg
    Commented Feb 11, 2022 at 19:40
  • $\begingroup$ Good video on this topic: youtube.com/watch?v=_oa-1ZBG3Ao $\endgroup$
    – Arnon Weinberg
    Commented Apr 16, 2023 at 3:03

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