The Hazards of Second-Guessing

The “wisdom of the crowd” maxim holds that a group is better than an individual at producing an accurate estimate, since an average across many people will remove the bias and random error in an individual guess.

The same is often true when an individual makes multiple guesses—a phenomenon that has been dubbed the “wisdom of the inner crowd”—whereby averaging a person's first and second estimates will generally produce a more accurate response than taking either one alone. People seem to know when they've misguessed and, if given another shot, often make a second guess that's in the right direction.

But making the inner process more explicit can negate this wisdom, suggests research by Chicago Booth's Celia Gaertig and University of Pennsylvania's Joseph P. Simmons.

Gaertig and Simmons hypothesized that the process was largely unconscious—and further, that asking people explicitly to evaluate their first guesses might disrupt the process so much as to dissolve the effect.

They carried out a series of experiments in which they asked participants to make a guess about something unknown. In one experiment, for instance, participants guessed what percentage of people preferred Indian food over Mexican food; in another, what percentage had a Twitter account; and so on.

Then all the participants made a second, different guess about the same initial question, but half the participants were asked to explicitly decide whether their first guess was too high or too low before guessing again, while the other half were only asked to make that second guess. Participants were paid a small amount for accuracy, which provided an incentive to make accurate predictions.