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bcoburn comments on Experimental evidence of the value of redundant oral tradition - Less Wrong
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More people confirming a story is certainly epsilon more evidence that the story is correct (Because more people confirming a story being evidence that it is false is absurd).
A more interesting question is, what is the magnitude of epsilon in a case like the one described here? This is in principle testable, but I certainly don't know exactly how to go about testing it.
Intuitively, I'd say it's some sort of logarithm or quadratic curve - if one person tells me they say a black dog the next street over, that bumps up my belief a lot; if two people tell me it, it still increases, but not nearly as much; and so on to the point where if 2 billion people tell me that, I begin to think this is part of some cult and start lowering credence.