l5-fooled-by-randomness_firehouse-effect

The firehouse effect describes how people in closed environments, like firemen in a firehouse or traders on a desk, unconsciously calibrate views to each other until the group drifts into a shared delusion that diverges from reality.

The wisdom of crowds requires independence of judgment among members. The firehouse effect destroys that independence, so group agreement becomes one opinion echoed back rather than multiple independent data points.

More intelligent groups build more sophisticated shared delusions because members construct elaborate justifications for positions an outsider would find obviously wrong. Intelligence strengthens the rationalization, not the accuracy.

Check whether each person reached their conclusion independently before discussion. If everyone calibrated to each other, the agreement is a single opinion echoed by the room, not empirical proof.

Consensus is reliable only when judgments are formed independently before aggregation. Once members observe and adjust to each other's views, the convergence reflects social dynamics rather than independent evidence.