Everyday Decisions are Noisier Than You Think — Here’s How AI Can Help Fix That

Human judgment is flawed by "noise," which is the undesirable variability in decisions made by experts on the same task. This is distinct from bias, which is a systematic error in one direction; noise represents the random scatter of judgments. The overall error in decision-making is a combination of both bias and noise, and reducing this variability is crucial for fairness and reliability in fields like insurance and law. AI is emerging as a tool to measure and mitigate this noise, for example, by analyzing judicial decision patterns. Group decisions can amplify noise through social dynamics like information cascades and group polarization, often leading to less accurate outcomes than individual judgments.