Social influence protects collective decision making from equality bias

A basic tenet of research on wisdom of the crowds – and key assumption of Condorcet’s Jury Theorem – is the independence of voters’ opinions before votes are aggregated. However, we often look for others’ opinions before casting our vote. Such social influence can push groups towards herding, leading to “madness of the crowds”. To investigate the role of social influence in joint decision making, we had dyads of participants perform a visual odd-ball search task together. In the Independent (IND) condition participants initially made a private decision. If disagreeing, discussion and collective decision ensued. In the Influence (INF) condition no private decisions were made and collective decision was immediately negotiated. Dyads that did not accrue collective benefit under IND condition improved with added social influence under INF condition. In Experiment 2, covertly, we added noise to one of the dyad members’ visual search display. The resulting increased heterogeneity in dyad members’ performances impaired the dyadic performance under IND condition (Bahrami et al., 2010). Importantly, dyadic performance improved with social influence under INF, replicating Experiment 1. Further analyses revealed that under IND condition, dyads exercised equality bias (Mahmoodi et al., 2015) by granting undue credit to the less reliable partner. Under INF condition, however, the more reliable partner (correctly) dominated the joint decisions. While social influence may impede collective success under ideal conditions, our results demonstrate how it can help the group members overcome factors such as equality bias, which could potentially lead to catastrophic failure

Wisdom or Madness? Comparing Crowds With Expert Evaluation in Funding the Arts

In fields as diverse as technology entrepreneurship and the arts, crowds of interested stakeholders are increasingly responsible for deciding which innovations to fund, a privilege that was previously reserved for a few experts, such as venture capitalists and grant-making bodies. Little is known about the degree to which the crowd differs from experts in judging which ideas to fund, and, indeed, whether the crowd is even rational in making funding decisions. Drawing on a panel of national experts and comprehensive data from the largest crowdfunding site, we examine funding decisions for proposed theater projects, a category where expert and crowd preferences might be expected to differ greatly. We instead find significant agreement between the funding decisions of crowds and experts. Where crowds and experts disagree, it is far more likely to be a case where the crowd is willing to fund projects that experts may not. Examining the outcomes of these projects, we find no quantitative or qualitative differences between projects funded by the crowd alone and those that were selected by both the crowd and experts. Our findings suggest that crowdfunding can play an important role in complementing expert decisions, particularly in sectors where the crowds are end users, by allowing projects the option to receive multiple evaluations and thereby lowering the incidence of “false negatives.

Adaptive Markets and the New World Order

In the adaptive markets hypothesis (AMH) intelligent but fallible investors learn from and adapt to changing economic environments. This implies that markets are not always efficient but are usually competitive and adaptive, varying in their degree of efficiency as the environment and investor population change over time. The AMH has several implications, including the possibility of negative risk premiums, alpha converging to beta, and the importance of macro factors and risk budgeting in asset allocation policies

The Cowl - v.80 - n.2 - Sep 17, 2015

The Cowl - student newspaper of Providence College. Volume 80 - No. 2 - September 17, 2015. 24 pages

The Cowl - v.78 - n.8 - Oct 31, 2013

The Cowl - student newspaper of Providence College. Vol 78 - No. 8 - October 31, 2013. 24 pages

An Empirical Examination of Peer vs. Expert Advice in Online Forums

Online discussion forums sponsored by electronic networks of practice offer a popular platform for a variety of participants to share their knowledge and provide feedback, including subject matter experts and a larger body of “peer” forum users with no particular expertise. Although prior research suggests that both expert and peer forum contributions can influence information seekers, current literature offers little guidance that explains how and when one is more influential than the other. This paper reports the results of two studies, a structured survey and a choice-based conjoint study, conducted to empirically validate a previously derived conceptual framework of 16 situational characteristics related to peer and expert advice seeking on forums. The results of our work offer theoretical and practical guidance for ongoing work in this area

The discrete dynamics of small-scale spatial events: agent-based models of mobility in carnivals and street parades

Small-scale spatial events are situations in which elements or objects vary in such away that temporal dynamics is intrinsic to their representation and explanation. Someof the clearest examples involve local movement from conventional traffic modelingto disaster evacuation where congestion, crowding, panic, and related safety issue arekey features of such events. We propose that such events can be simulated using newvariants of pedestrian model, which embody ideas about how behavior emerges fromthe accumulated interactions between small-scale objects. We present a model inwhich the event space is first explored by agents using ?swarm intelligence?. Armedwith information about the space, agents then move in an unobstructed fashion to theevent. Congestion and problems over safety are then resolved through introducingcontrols in an iterative fashion and rerunning the model until a ?safe solution? isreached. The model has been developed to simulate the effect of changing the route ofthe Notting Hill Carnival, an annual event held in west central London over 2 days inAugust each year. One of the key issues in using such simulation is how the processof modeling interacts with those who manage and control the event. As such, thischanges the nature of the modeling problem from one where control and optimizationis external to the model to one where this is intrinsic to the simulation