information asymmetry, Common-Knowledge Effect

It is a very relatable experience to information asymmetry from project experiences, domain understanding.

Some instances when 

• Customers share limited information 
• Unexplained features about transactions
• Correlations were removed and data anonymized

This usually happens and results in poor forecasting

When two people do not have same level of info, the perception and understanding varies

Common-Knowledge Effect: A Harmful Bias in Team Decision Making

The common-knowledge effect is a decision-making bias where teams overemphasize the information most team members understand instead of pursuing and incorporating the unique knowledge of team members.

Preference Bias

• We are more likely to discuss information that aligns with our initial preferences or preconceived notions.
• Even when all information is shared with the group, we still process that information according to our initial preferences.

Social Comparison

• We seek social acceptance and avoid conflict with teammates. We tend to adopt the group's prevailing view when evaluating information in unclear situations.
• Information familiar to multiple team members becomes socially validated and more likely to be repeated and affirmed.

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