Wisdom of Crowds
Posted on August 22, 2004 in web.
In Wisdom of Crowds, James Surowiecki explores a deceptively simple idea that has profound implications: large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.
His rubric covers a range of problems, including driving in traffic, competing on TV game shows, maximizing stock market performance, voting for political candidates, navigating busy sidewalks, tracking SARS and designing Internet search engines like Google. Google, for instance, is smart because of its information from the "crowd". (See also the clever JellyBean Contest).
But in order for the crowd to be smart, it must satisfy four conditions:
It needs to be diverse, so that people are bringing different pieces of information to the table. It needs to be decentralized, so that no one at the top is dictating the crowd's answer. It needs a way of summarizing people's opinions into one collective verdict. And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.
Aggregation is tricky because there are so many different ways to aggregate opinion, not all of which are right for a given situation.
Furthermore, his whole concept of individual bettors on a race-track participating in group-think, raises and interesting question: can collective intelligence really be created from individuals acting at their the common denominator of greed and personal gain at the expense of others?