John Morgan

John Morgan, a Princeton economist, collaborated with Alan S. Blinder on experiments that challenged the assumption that committees are necessarily slow or less intelligent than their strongest members. By modeling both economic decision-making and the work of central bankers, they found that groups could make decisions quickly and accurately—and sometimes outperform even their best individual member.

Researching Group Decisions

Blinder came to the study with direct experience of monetary policy: in the mid-1990s he had served as vice chairman of the Federal Reserve Board, whose interest-rate decisions are made by the Federal Open Market Committee. That experience had left him skeptical of decision-making by committee. With Morgan, he designed a study to test two familiar objections: whether groups can reach intelligent decisions and whether they can do so efficiently.

Experiments in Detecting Change

The first experiment used urns containing equal numbers of blue and red balls. Participants were told that after the first ten draws, the proportions would shift so that one color made up 70 percent of the balls and the other 30 percent. Their task was to identify as quickly as possible which color had become more common; every draw made after the shift carried a penalty. The exercise represented the challenge of recognizing changing economic conditions and deciding whether policy needed to change.

Students first played individually, then in groups allowed to discuss freely, then individually again, and finally in groups once more. This sequence helped control for learning. The groups made decisions both faster and more accurately: they identified the direction of the change correctly 89 percent of the time, compared with 84 percent for individuals, and they outperformed even the best individual.

A second experiment asked students to act as central bankers, setting interest rates in response to changes in inflation and unemployment. They had to detect whether the economy was slowing or gaining momentum and choose the appropriate direction for rates. Again, groups made better decisions than individuals and did so just as quickly. Individuals moved rates in the wrong direction far more often. Most strikingly, there was no correlation between the smartest person’s performance and the group’s performance: the result could not be explained as the group simply following its strongest member.

Implications for Committees

A Bank of England study modeled on the Blinder–Morgan experiment reached the same conclusions: groups could decide intelligently and quickly, and could do better than their smartest members. The findings answer the efficiency objection without claiming that discussion is always worthwhile; deliberation can help, though its benefits may eventually be outweighed by its costs.

The experiments also point to a condition for using teams effectively. A group must have a way to aggregate its members’ judgments and actual authority to decide. If an organization gathers a team only to offer advice while a separate leader retains the decision, it gives up the advantage the team was meant to provide: a collective judgment that can exceed individual performance. The work therefore treats group intelligence not as an automatic property of putting people together, but as an outcome that depends on how decisions are structured.