Average individual error - group’s diversity = collective error

Syracuse University

The wisdom of crowd effect suggests that the median estimate of a group is more likely to have  closer accuracy to an answer than the estimate of an individual.

Wisdom of Crowd Effect

Lorenz, J., Rauhut, H., Schweitzer, F., &amp; Helbing, D. (2011). How social influence can undermine the wisdom of crowd effect. Proceedings of the National Academy of Sciences, 108(22), 9020–9025. https://doi.org/10.1073/pnas.1008636108  

How social influence can undermine the wisdom of crowd effect

The range reduction effect refers to the phenomenon of when the position of truth for a group estimate moves to the peripheral regions of the range of estimates. This makes the crowd’s estimated response less reliable.

Range Reduction Effect

The confidence effect refers to boosts in confidence of individuals after the convergence of estimates within the group, despite there being no actual improvement in response accuracy. 

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