Richard Larrick

Richard Larrick appears in The Wisdom of Crowds as a researcher whose work helps explain a persistent mistake in decision-making: people often seek the one expert who can supposedly settle a question, while discounting the knowledge produced by combining judgments across a group. His collaboration with Jack B. Soll gives the book both a name for this impulse, “chase the expert,” and a practical alternative: take the group’s estimates seriously and average them rather than betting everything on choosing the best individual.

Research on combining opinions

Larrick and Soll’s work addresses why people resist averaging. The book argues that many treat an average as a compromise that weakens good advice, so, when offered a choice between selecting one expert and combining views from several experts, they try to identify the best expert. This preference is not merely a technical error about arithmetic. It reflects a deeper assumption that intelligence belongs to particular individuals, and that finding the right consultant or chief executive will make the decisive difference.

The book also identifies a difficulty that makes this search self-reinforcing: experts do not reliably announce themselves through confidence. Experts are no more confident in their abilities than average people, and both are overconfident; moreover, a person’s self-assessment has little relationship to actual performance. Knowing something and knowing that one knows it are different skills. If a group cannot manage without the right expert, the book observes, it is unclear why that same group should be expected to recognize the expert when one appears.

Larrick and Soll’s phrase “chase the expert” names the resulting trap. The phrase comes from their paper “Combining Opinions: Why Don’t People Average?,” presented at the 2002 Behavioral Decision Research in Management biennial meeting. A related analysis appeared in their 2003 INSEAD working paper, “Intuitions About Combining Opinions: Misappreciation of the Averaging Principle.” The book returns to this research to frame expert-seeking not as a reliable route to better decisions but as a costly response to a poor intuition about how combined judgments work.

The crowd, expertise, and apparent success

The argument does not require dismissing expertise. Rather, it challenges the assumption that one must find the smartest person to make use of knowledge. A crowd includes its geniuses, but its accuracy may come from combining many judgments, not from identifying a hidden star. When a large group predicts horse-race outcomes, observers may credit a few exceptionally smart participants instead of recognizing the crowd’s performance as a whole. Larrick and Soll’s account counters this tendency: the relevant question is not only who knows most, but how dispersed judgments can be brought together.

The book gives another reason to distrust the search for a singular predictor: randomness can produce individuals with impressive records. With enough people making forecasts, some will appear unusually successful over time, but that record may reflect chance rather than skill and may not persist. Finding smart people can be useful; trying to find the smartest person is a different and less dependable undertaking. Larrick’s work thus supports a distinction between making use of expertise and allowing the pursuit of a presumed supreme expert to displace aggregation.

Applications beyond individual forecasting

The book applies Larrick and Soll’s lesson to corporate decisions. Major decisions should be informed by decision markets, it argues, but markets need not make those decisions. Nor does that qualification justify concentrating authority in one executive: the more important the decision, the less sense there is in leaving it to a single person. Although boards are formally supposed to have the final say on major corporate matters, in practice they often defer to the chief executive, revealing how difficult the assumption of individual authority is to overcome.

The contrast with financial markets makes the assumption especially visible. People readily accept that a market can do a better job of valuing companies than a handful of highly capable people, yet may see nothing unusual in a drug-company chief executive deciding which medicines deserve continued investment and which should be abandoned. The book uses that contrast to ask why collective judgment is trusted in one domain but individual judgment remains the default in another.

As an example of a different corporate practice, the book points to General Motors during its period as the world’s most successful corporation. Important decisions there were made through what Alfred Sloan called “group management.” It also invokes Peter Drucker’s advice that smart chief executives build a management team around them. These examples do not make group deliberation automatically reliable; they show how leadership can recognize the limits of individual knowledge and organize decisions around a team instead.

The Federal Reserve provides a further institutional comparison: its decisions are made by the board as a whole, not by Alan Greenspan alone. The book sets this collective process beside the work of John Craven, whose small, diversely informed group made individual guesses about uncertain events and combined them into a location estimate for the missing Scorpion submarine. In the book’s account, the resulting decision was essentially perfect. Larrick and Soll’s principle therefore reaches beyond the act of averaging: it supports deliberately gathering judgments from people with different kinds of knowledge, then making the combined result matter.

Significance in the book

Larrick is not presented through a personal biography or a sustained life narrative. His role is intellectual and relational: alongside Jack B. Soll, he provides research and terminology that help the book challenge the popular belief that sound decisions depend on discovering a uniquely capable individual. The work links a psychological tendency—misunderstanding the value of averages—to familiar choices about consultants, executives, corporate boards, and expert predictions.

The book’s central reversal is that a group may be blind to its own wisdom. People can regard averaging as dilution, infer expertise from apparent success, or assume that confidence signals knowledge; each habit directs attention back toward a celebrated individual. Larrick and Soll’s contribution is to turn that instinct into something that can be examined and corrected. In the book’s larger argument, better decisions often depend less on finding a flawless authority than on combining independent judgments and respecting the knowledge distributed across a group.