Simple Heuristics and Information Sharing in Groups

In today's world of business and politics, collaboration is a common and valued practice. A group's potential to outperform individual decision makers is especially apparent if the knowledge of the members of a team or committee is distributed such that each member typically favors an inferior option at the outset. This biased information distribution is called a hidden profile because the full information about the options (i.e., their profile) is initially hidden from every individual group member. Previous research indicated that groups have difficulties mastering the challenge of communicating and integrating unique information held by single group members. As a consequence, groups are typically not able to decide in favor of the best option when its profile is hidden. The chapter summarizes the results of simulation studies in which various decision strategies that a group may apply with respect to their ability to solve hidden-profile problems were compared. Specifically, the chapter describes the conditions under which compensatory strategies outperform simple heuristics, and vice versa. The chapter then reviews two experiments that focus on participants' performance as a function of how information is distributed within the group. Groups can solve hidden-profile problems if (a) group members enter discussions without preconceived opinions (naïve groups), and (b) information regarding the choice alternatives is presented in the form of common cues, which facilitates the application of a cue-based heuristic. The simulation studies and experiments support the notion of ecological rationality: The performance of strategies and of participants was affected by information structures of the environment, in particular, by the skewness of cue validities and by the distribution of cue values across group members