And, by idiots we mean not that people are of low intelligence necessarily but people who fail to leverage the knowledge and intelligence of others.
Via Robin Hanson
Next, we look at the final round where information about disagreement is made public and, under common knowledge of rationality, should be sufficient to eliminate disagreement. Here we find that individuals weigh their own information more than twice that of the five others in their group. When we look separately at those who err by disagreeing in round 1, we find that these people weigh their own information more than 10 times that of others, putting virtually no stock in public information. This indicates a different type of error, that is, a failure of some individuals to learn from each other.
This is potentially – maybe some people have worked this out carefully – a serious source of co-ordination problems.
Everyone knows the classic rhetorical: If all your friends jumped off the Brooklyn Bridge would you?
The problem here is that there is general agreement that the answer is no, but in a world of rational people the answer is yes. If a bunch of people show a high degree of confidence that jumping off the bridge is the right thing to do that is a sign that they know something you don’t.
So, why is the answer no?
This experiment would suggest that the probability that all your friends are idiots who have happened to stumble on a bad idea is higher than the probability that jumping off the bridge is in fact a good idea.
In an ideal world agreement wraps around the world, so that you get information from your friends who have gotten from their friends who have gotten it from their friends and so on until the entire population is connected into a giant hivemind, through which information is rapidly transmitted.
Idiots degrade the signal and mean that information does not flow very far and wide disagreements are possible, especially between people who do not share broadly similar social networks.