The Role of External Advice in Forming Individuals and Groups Decision-making Process

Abstract

People often receive advice from others when making decisions, which is an effective way of improving the quality of decision-making results by integrating external information into decisions. In decision-making literature, the number of participants in decision-making can be divided into two categories: individual and group decisions. In this study we investigated group advice-taking behavior compared with individual's in the task of making judgmental forecasts for varying advice quality and feedback conditions. Individuals took advice significantly more than groups did in both the reasonable and unreasonable advice treatments, and the WOA mediated the relationship between a group condition and forecast accuracy. When the advice presented was unreasonable, the mean WOA score in the individual treatment exceeded the mean, and the difference was significant. When unreasonable advice was given, individuals were more receptive to advice than groups. When reasonable advice was provided, individuals accepted it more than the groups in both reasonable and unreasonable advice treatments. There was a significant positive correlation between the perceived disagreement level and the standard deviation of three group members' initial forecasts. There was no statistically significant difference in advice taking behavior across the different time series models in either individual or group treatments. We found that both individuals and groups accept less advice regardless of quality than indi-viduals and are better able to discriminate between unreasonable and reasonable advice.