Author: Daniel Kahneman
Quotes of Author: Daniel Kahneman
decorrelate error! To understand how this principle works, imagine that a large number of observers are shown glass jars containing pennies and are challenged to estimate the number of pennies in each jar. As James Surowiecki explained in his best-selling The Wisdom of Crowds, this is the kind of task in which individuals do very poorly, but pools of individual judgments do remarkably well. Some individuals greatly overestimate the true number, others underestimate it, but when many judgments are averaged, the average tends to be quite accurate. The mechanism is straightforward: all individuals look at the same jar, and all their judgments have a common basis. On the other hand, the errors that individuals make are independent of the errors made by others, and {in the absence of a systematic bias} they tend to average to zero. However, the magic of error reduction works well only when the observations are independent and their errors uncorrelated. If the observers share a bias, the aggregation of judgments will not reduce it. Allowing the observers to influence each other effectively reduces the size of the sample, and with it the precision of the group estimate. book-quote
