Flaws in Group Decision-Making

Source: Chapter 14 of Collapse by J. Diamond

Individuals make bad decisions all the time but additional factors contribute to bad group decisions. Both in state governments and in companies!

1. Failure to Anticipate a Problem

1. Sometimes is impossible to do so
2. Prior experience is lost (in pre-literate societies) or forgotten. (We forget past gas shortages)
3. False analogy (French preparations for WW II)

2. Failure to Perceive the Problem when it arrives

1. Imperceptible origins
2. Distant managers
3. Slow trends and "landscape amnesia" (global warming)

3. Failure to Try to solve it. Usually Rational Bad Behavoir.

1. Good for me, bad for the others. Often benefit to few is large, damage to many miniscule (e.g. agricultural subsidies). Lobbying!
2. Tragedy of commons.
3. Clash between short term interest (individuals) and long term (society)

Actions or inactions of self-absorbed rulers have been frequently the cause of collapse. Competition for short term prestige does it.

4. Failure to solve it -- because of disastrous values - Irrational Bad Behavior

1. Values that are good for one time and place may be bad for others. (Having many children was good in times of high mortality.)
2. Clash between short term and long term interests.
3. Crowd psychology - group think.
4. Psychological denial. (Do not worry about the dam breaking if you live close by and downstream!)

4A seems the most common factor. Leaders (and people) fail to adapt to changing circumstances. In the case of companies it often cited as "the founder's curse." The qualities that make an individual a successful leader of a small company (a few hundred people) become liabilities for a leader of even a mid-sized compnay (several thousand people). Either the leader has to change his/hers mindset (a tough thing to do) or the leader must be replaced.

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