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The relationship between crowd majority and accuracy for binary decisions

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  • Michael D. Lee
  • Megan N. Lee

Abstract

We consider the wisdom of the crowd situation in which individuals make binary decisions, and the majority answer is used as the group decision. Using data sets from nine different domains, we examine the relationship between the size of the majority and the accuracy of the crowd decisions. We find empirically that these calibration curves take many different forms for different domains, and the distribution of majority sizes over decisions in a domain also varies widely. We develop a growth model for inferring and interpreting the calibration curve in a domain, and apply it to the same nine data sets using Bayesian methods. The modeling approach is able to infer important qualitative properties of a domain, such as whether it involves decisions that have ground truths or are inherently uncertain. It is also able to make inferences about important quantitative properties of a domain, such as how quickly the crowd accuracy increases as the size of the majority increases. We discuss potential applications of the measurement model, and the need to develop a psychological account of the variety of calibration curves that evidently exist.

Suggested Citation

  • Michael D. Lee & Megan N. Lee, 2017. "The relationship between crowd majority and accuracy for binary decisions," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 12(4), pages 328-343, July.
  • Handle: RePEc:jdm:journl:v:12:y:2017:i:4:p:328-343
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    References listed on IDEAS

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    1. Ladha, Krishna K., 1995. "Information pooling through majority-rule voting: Condorcet's jury theorem with correlated votes," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 353-372, May.
    2. Rachel Croson & James Sundali, 2005. "The Gambler’s Fallacy and the Hot Hand: Empirical Data from Casinos," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 195-209, May.
    3. Joseph P. Simmons & Leif D. Nelson & Jeff Galak & Shane Frederick, 2011. "Intuitive Biases in Choice versus Estimation: Implications for the Wisdom of Crowds," Journal of Consumer Research, Oxford University Press, vol. 38(1), pages 1-15.
    4. Michael D. Lee & Irina Danileiko, 2014. "Using cognitive models to combine probability estimates," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 9(3), pages 259-273, May.
    5. Blinder, Alan S & Morgan, John, 2005. "Are Two Heads Better than One? Monetary Policy by Committee," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(5), pages 789-811, October.
    6. Clintin P. Davis-Stober & David V. Budescu & Stephen B. Broomell & Jason Dana, 2015. "The Composition of Optimally Wise Crowds," Decision Analysis, INFORMS, vol. 12(3), pages 130-143.
    7. Lionel Page & Robert T. Clemen, 2013. "Do Prediction Markets Produce Well‐Calibrated Probability Forecasts?-super-," Economic Journal, Royal Economic Society, vol. 123(568), pages 491-513, May.
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    Cited by:

    1. Michael D. Lee & Irina Danileiko & Julie Vi, 2018. "Testing the ability of the surprisingly popular method to predict NFL games," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 13(4), pages 322-333, July.

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