A Simulation-Based Approach to Understanding the Wisdom of Crowds Phenomenon in Aggregating Expert Judgment

Titelangaben

Afflerbach, Patrick ; van Dun, Christopher ; Gimpel, Henner ; Parak, Dominik ; Seyfried, Johannes:
A Simulation-Based Approach to Understanding the Wisdom of Crowds Phenomenon in Aggregating Expert Judgment.
In: Business & Information Systems Engineering. Bd. 63 (2021) Heft 4 . - S. 329-348.
ISSN 1867-0202
DOI: https://doi.org/10.1007/s12599-020-00664-x

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Abstract

Analytical and empirical research has shown that the aggregation of multiple independent expert judgments significantly improves the quality of forecasts as compared to individual expert forecasts. This “wisdom of crowds” (WOC) has recently sparked substantial research interest. However, previous studies on the strengths and weaknesses of aggregation models have been limited by restricted empirical data and analytical complexity. Based on a comprehensive analysis of the existing knowledge of WOC and different aggregation models, we designed and implemented a simulation model to emulate WOC scenarios with a wide range of parameters. The model has been thoroughly evaluated: We validated its assumptions against propositions derived from relevant literature, built a computational representation, and showed its applicability in a variety of experimental scenarios to validate its behavior. Experimental scenarios include the investigation of aggregation model behavior on a detailed level, the assessment of aggregation model performance, and the exploration of previously undiscovered hypotheses on WOC. The simulation model helps expand the understanding of WOC in fields where previous research was restricted. Additionally, it gives directions for further developing aggregation models, and contributes to a general understanding of the WOC phenomenon.