Group diversity and decision quality: Amplification and attenuation of the framing effect

Department of Psychology & Center for the Study of Rationality, Hebrew University of Jerusalem, 91905, Israel
International Journal of Forecasting (Impact Factor: 1.49). 01/2011; DOI: 10.1016/j.ijforecast.2010.05.009

ABSTRACT Do groups make better judgments and decisions than individuals? We tested the hypothesis that the advantage of groups over individuals in decision-making depends on the group composition. Our study used susceptibility to the framing effect as a measure of decision quality. Individuals were assigned to one of two perspectives on a choice problem. The individuals were asked to indicate their individual preference between a risky option and a risk-free option. Next, they were asked to consider the same (or a related) choice problem as a group. Homogeneous groups were composed of similarly framed individuals, while the heterogeneous ones were composed of differently framed individuals. In comparison to individual preferences, the homogeneous groups’ preferences were polarized, and thus the framing effect was amplified; in contrast, the heterogeneous groups’ preferences converged, and thus the framing effect was reduced to zero. The findings are discussed with regard to group polarization, the effects of heterogeneity on group performance, and the Delphi forecasting method.

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May 22, 2014