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Decisions Involving Groups of Individuals

Two simple advantages arise from obtaining group judgments in decision analysis. First,
more information about possible ranges of utilities and probabilities can be obtained, and it is
then possible to perform sensitivity analysis on these ranges to see if the decision specied by
the analysis is changed by these variations. Second, a group of people who are involved in
such a decision process may become more committed to implementing the decision which is
eventually made. As we shall see in the section on decision conferencing, this latter
advantage can be a major one.
Mathematical Aggregation
There are a number of advantages to be gained by using mathematical aggregation to
combine the judgments of the individual members of a group.
Aggregating Judgments In General
Single-value estimates of factors such as costs, sales or times to complete a project are often
used in decision analysis models when the use of a probability distribution for every
unknown quantity would lead to a model which was too complex to be useful. Two methods
of combining individual estimates of unknown quantities are considered below.
Taking a simple average of the individual judgments
The reliability of this group average will improve as the group size increases because the
random error inherent in each judgment will be averaged out. However, each additional
member of the group will bring progressively smaller improvements in reliability, so that a
point will be reached where it will not be worth the effort or cost of extending the group
because a sufciently reliable estimate can be achieved with the existing membership.
Taking a weighted average of the individual judgments
When some members of the group are considered to be better judges than others then it may
be worth attaching a higher weight to their estimates and using a weighted average to
represent the group judgment.
Aggregating probability judgments
There are particular problems involved when probabilities need to be aggregated, as the
following example shows. Because of these types of problem a number of alternative
procedures have been suggested for aggregating probabilities. One approach is to regard one
group members probability estimate as information which may cause another member to
revise his or her estimate using Bayes theorem. Another approach is to take a weighted
average of individual probabilities, using one of the three methods of weighting which we
referred to earlier.
Aggregating preference judgments
When a group of individuals have to choose between a number of alternative courses of
action is it possible, or indeed meaningful, to mathematically aggregate their preferences to
identify the option which is preferred by the group? To try to answer this we will rst
consider decision problems where the group members state their preferences for the
alternatives in terms of simple orderings (e.g. I prefer A to B and B to C). Then we will
consider situations where a value or a utility function has been elicited from each individual.
Aggregating preference orderings
These sorts of problems led Arrow to ask whether there is a satisfactory method for
determining group preferences when the preferences of individual members are expressed as
orderings. He identied four conditions which he considered that a satisfactory procedure
should meet:
1) The method must produce a transitive group preference order for the options being

2) If every member of the group prefers one option to another then so must the group.
(You will recall that this condition was not fullled in the production
manager/accountants problem which we considered earlier.)
3) The group choice between two options, A and B, depends only upon the preferences
of members between these options and not on preferences for any other option. (If this
is not the case then, as we saw above, an individual can inuence the group ordering
by lying about his preferences.)
4) There is no dictator. No individual is able to impose his or her preferences on the
Aggregating values and utilities
It is important to note that Arrows Impossibility Theorem refers only to situations where
individuals have stated the order of their preferences. A statement giving an individuals
preference order does not tell you about that persons intensity of preference for the
Unstructured Group Processes
One of the major conclusions of research work on descriptions of group decision making is
that of well-documented shortcomings. The presence of powerful individuals can inhibit the
contribution of those who are lower down the hierarchy. Talkative or extroverted members
may dominate the discussions. Indeed, variations in seating arrangements can tend to direct
or inhibit individuals contributions.
Structured Group Processes
Awareness of the factors that can degrade group decision making combined with the implicit
belief that group judgment can potentially enhance decision making has led to a number of
structured methods to enhance group decision making by removing or restricting
interpersonal interaction and controlling information ow. One such major method has been
Delphi. Essentially, Delphi consists of an iterative process for making quantitative judgments.
The phases of Delphi are:
1) Panelists provide opinions about the likelihood of future events, or when those events
will occur, or what the impact of such event(s) will be. These opinions are often given
as responses to questionnaires which are completed individually by members of the
2) The results of this polling of panelists are then tallied and statistical feedback of the
whole panels opinions (e.g. range or medians) is provided to individual panelists
before a repolling takes place. At this stage, anonymous discussion (often in written
form) may occur so that dissenting opinion is aired.
3) The output of the Delphi technique is a quantied group consensus, which is usually
expressed as the median response of the group of panelists
Decision Conferencing
However, a major question which still remains to be answered is: Are decisions that are
conferenced to consensus more or less valid than unaided judgment or prescriptive solutions?
For example, does the situational context of decision conferencing produce conditions for
groupthink? Phillips has argued that this is not so, since:
1) Participants are not on home ground. Often decision conferences take place in hotels
or an especially designed room on the decision analysts premises.
2) The small group is carefully composed of people representing all perspectives on the
issue to be resolved so that adversarial processes operate in the group to check bias
and explore alternative framings of the decision problem.
3) The decision analyst who acts to facilitate the conference is a neutral outsider who is
sensitive to the unhelpful effects of groupthink and reects this back to the group.