Common Knowledge Effect

The common knowledge effect describes the impact on group decision making of whether knowledge relevant to a decision is shared by all group members prior to discussion. Specifically, laboratory studies have shown that information known by everyone prior to discussion has a more powerful influence on decisions than information not shared by everyone. The common knowledge effect demonstrates that an irrelevant factor—the number of members who know a particular piece of information—can affect group decisions. If a piece of unshared information is crucial to making a correct decision, the result may be an incorrect decision. This entry looks at the common knowledge effect and some possible explanations for such outcomes, then discusses what research has shown about promoting better decisions.