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). 03/2011; 27(1):41-49. DOI: 10.1016/j.ijforecast.2010.05.009


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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    • "A consequence for group decision environments is that decision support has to include mechanisms that pro-actively encourage knowledge exchange. One reason for increased knowledge exchange between group members is group diversity (in terms of dimensions such as demographic and educational background ), i.e., the higher the degree of diversity the higher the probability of higher quality decision outcomes (measured , e.g., in terms of the degree of susceptibility to the framing effect [23]). Schulz-Hardt et al. [17] discuss the role of dissent in group decision making: the higher the dissent in initial phases of a group decision process, the higher the probability that the group manages to share the decisionrelevant information (discover the hidden profile). "

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    • "• Insights gained beyond borders of firm might be novel to company [28] • Not frequently practiced since some decision makers perceive internal knowledge to be superior to external knowledge [28] • Seeking internal advice might foster an atmosphere of trust that encourages employees to share information and to develop new ideas [28] • Decision makers are more critical: internal information can be better evaluated than external information [29] • Scarce and therefore valuable information [29] • False information harder to identify [29] • Easy to obtain and analyze [16] [29] • In general, regarded to be less valuable than external advice [16] • Persons seeking outside information rewarded for efforts with improved status [16] • Danger that information from external sources is assumed to be true knowledge: accuracy is rarely challenged [31] • Generated information is kept internal [32] • Adhering to internal sources reinforces existing mindset and blind areas [1] • " Organizational myths " and " artificial and illusory level of comfort " are challenged by external sources of information [33, p. 66] • Involve stakeholders [34] [35] • External stakeholders have a birds-eye perspective and focus on different aspects because of different backgrounds [1] [21]. to be very high, so that they are expected to use detailed explanations of their reasoning when they find it necessary. "
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    • "This process was designed to create groups small enough to encourage discussion and allow consensus, but with the full range of interests and expertise represented in each group. Including as wide a range of interests as possible in the group has been demonstrated by social psychologists to be important for eliciting expert judgement effectively (Bolger & Wright, 2011; Hussler et al., 2011; Yaniv, 2011). During the discussion sessions, all participants could see the anonymous comments others had made during the first voting stage, and the number of votes for each knowledge need. "
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