Does consultation improve decisionmaking

Authors: Alessia Isopi Daniele Nosenzo Chris Starmer

Publish Date: 2014/06/20

Volume: 77, Issue: 3, Pages: 377-388

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Abstract

This paper reports an experiment designed to test whether prior consultation within a group affects subsequent individual decisionmaking in tasks where demonstrability of correct solutions is low In our experiment subjects considered two paintings created by two different artists and were asked to guess which artist made each painting We observed answers given by individuals under two treatments In one subjects were allowed the opportunity to consult with other participants before making their private decisions in the other there was no such opportunity Our primary findings are that subjects in the first treatment evaluate the opportunity to consult positively but they perform significantly worse and earn significantly lessConsultation is a key ingredient of many deliberative processes In many walks of life individuals consult with others before taking important decisions Obvious examples include investors consulting with financial advisors or individuals talking with health professionals when choosing between alternative medical interventions With the growth of the internet sources of ‘advice’ are expanding rapidly while the costs of accessing them are often very low But here as in the examples mentioned above the quality of advice obtained may be difficult to assess raising interesting questions about the conditions under which consulting with others can be expected to improve or worsen individual decisionmakingOne body of literature which might inform understanding of the influence of consultation on individual decisions is the extensive research examining the comparative success of decisions made by individuals versus decisions made by groups There is now considerable evidence that groups can often ‘outperform’ individuals The bulk of it comes from experiments in social psychology examining behavior in decision problems that have correct solutions and thus have a meaningful criterion for assessing decision accuracy Within this literature a widely reported finding is that groups are more likely to report the correct answer see eg Hastie 1986 Laughlin et al 2003 October 2006 and references therein Economists have also compared individual and group decisions A relatively small literature has investigated the incidence of preference ‘anomalies’ comparing groups and individuals where one of the first contributions is Bone et al 1999 A larger literature starting with Cason and Mui 1997 and Bornstein and Yaniv 1998 has focused on interactive decisions where a common result is that groups’ decisions more closely track standard game theoretic predictionsThe fact that groups often perform better than individuals suggests the possibility that consultation with others prior to an individual decision might also have improving effects There is however limited evidence of how deliberation within a group affects the quality of a later individual decision Maciejovsky et al 2013 report that subjects who have solved decision problems as part of a group subsequently perform better as individuals in similar decision tasks Charness et al 2010 find that group consultation mitigates some decision anomalies found in individual choice experiments While these recent results chime with the broader literature comparing the success of individuals and groups like many of the studies reviewed by Hastie 1986 both of them also share a design feature which may limit their scope that feature is the use of tasks which have demonstrably correct solutions1We will say that the solution to a decision problem is fully demonstrable in a given context when someone who knows it or how to identify it can convey that knowledge to other individuals facing the same decision2 In previous research demonstrability has usually been implemented using tasks which have correct answers eg multiplying two numbers together or finding the solution to a logical reasoning problem such as Wason’s selection task In such cases while some individuals may not independently find the correct solution the task is demonstrable if they will recognize the solution when presented with suitable arguments to identify itHigh demonstrability of solutions may be an important ingredient explaining the relative success of groups over individuals across a range of existing experimental findings3 But it is not obvious that demonstrability is characteristic of most settings in the world where individuals seek advice from others In fact ‘experts’ or ‘professional’ advisors often encounter difficulties in providing compelling arguments in defense of their estimations of say the research publication potential of different candidates in an academic job market the payoff from a particular model of corporate rebranding the profitability of a proposed investment or the risks associated with a new drug treatment Indeed such cases are often characterized by disagreements in the assessments of professionalsIn this paper we examine the effect of consultation on individual decisionmaking in a task designed to have low demonstrability by comparing behavior across two treatments In one treatment before facing the decision subjects discussed the task with other participants We compare decisions made by these subjects with those made in a control group who had no opportunity to discuss the task with others Notice that our study differs from the literature which compares the decisions of groups with those of single individuals because our study focuses on whether deliberating with others has an impact on subsequent individual decisionmakingOur primary findings are that subjects who had the opportunity to consult reported that it was helpful but they actually performed worse and earned less than those who had no such opportunity This effect is partly driven by a tendency for individuals to form consensus around uniformed opinion a result which as we discuss further below has some resonance with the ‘groupthink’ phenomena reported widely in social psychology

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