The phrase “the wisdom of the markets” sounds like a dark joke these days, but judgments by groups of people are usually more accurate than judgments by a single person. (That is, as long as the group result is the average of a bunch of individual results. The ability of groups to make reasoned decisions together is notoriously bad, as this poster brilliantly illustrates.) The British Psychological Society blog describes a new experiment showing that people can get this effect within their very own, single, solitary mind:

You can boost your quiz performance by unleashing the crowd within, a new study shows. The next time your’re asked to estimate a historical date, for example, try doing the following: make your first estimate; then pause and assume your first guess was off the mark. Consider why, then use this new perspective to make a second estimate. Average your two estimates and, chances are, this newly calculated date will be more accurate than your original answer. The new approach is called “dialectical boot-strapping” and according to Stefan Herzog and Ralph Hertwig, it really works.

…

“Part of the wisdom of the many resides in an individual mind,” the researchers said. “Dialectical bootstrapping is a simple mental tool that fosters accuracy by leveraging people’s capacity to construct conflicting realities.”

I bolded that last clause because this is really at the crux of things. In my Harvard Business School job, I recently reviewed a huge amount of literature on cognitive biases, or the typical ways people tend to make mistakes. There’s a ton of these biases: we overestimate the role we ourselves played in events, for good or ill; we throw good money after bad; we leap to conclusions about other people without taking their circumstances into account; we cannot predict our own emotions accurately. Really, spend enough time reading about all of the ways in which people are predictably irrational and you won’t even want to get out of bed, your chances of making a good decision are so low.

And you can’t really “debias” people like you’d debug a computer program. It’s not a quantitative thing. You can’t simply tell a person, “People typically overestimate how many calories they burn by 20%, so the next time you go to the gym, multiply the number of calories you think you burned by 0.8″ and have that make any difference. The only thing that seems to help people make better decisions is for them to aggressively and imaginatively think through alternate scenarios–in short, to envision how their present construction of events could be wrong. Or could go wrong–even if you are understanding a situation correctly, circumstances can change. If you are thinking to wait out the recession in grad school, say, it would be worthwhile to ask yourself: What if the economy dramatically turned around? Would this still be the right decision?

“What if?” and “How do I know?” — get in the habit of asking yourself these questions. They only make you feel dumb at first.