Affiliation:
1. School of Business, University of California, Riverside, Riverside, California 92521;
2. Department of Psychology, Fordham University, Bronx, New York 10458
Abstract
A crucial challenge for organizations is to pool and aggregate information effectively. Traditionally, organizations have relied on committees and teams, but recently many organizations have explored the use of information markets. In this paper, the authors compared groups and markets in their ability to pool and aggregate information in a hidden-profiles task. In Study 1, groups outperformed markets when there were no conflicts of interest among participants, whereas markets outperformed groups when conflicts of interest were present. Also, participants had more trust in groups to uncover hidden profiles than in markets. Study 2 generalized these findings to a simple prediction task, confirming that people had more trust in groups than in markets. These results were not qualified by conflicts of interest. Drawing on experienced forecasters from Good Judgment Open, Study 3 found that familiarity and experience with markets increased the endorsement and use of markets relative to traditional committees.
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Subject
Management of Technology and Innovation,Organizational Behavior and Human Resource Management,Strategy and Management
Cited by
10 articles.
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