Wed . 20 Jun 2020
TR | RU | UK | KK | BE |

The Wisdom of Crowds

the wisdom of crowds, the wisdom of crowds by james surowiecki
The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, published in 2004, is a book written by James Surowiecki about the aggregation of information in groups, resulting in decisions that, he argues, are often better than could have been made by any single member of the group The book presents numerous case studies and anecdotes to illustrate its argument, and touches on several fields, primarily economics and psychology

The opening anecdote relates Francis Galton's surprise that the crowd at a county fair accurately guessed the weight of an ox when their individual guesses were averaged the average was closer to the ox's true butchered weight than the estimates of most crowd members

The book relates to diverse collections of independently deciding individuals, rather than crowd psychology as traditionally understood Its central thesis, that a diverse collection of independently deciding individuals is likely to make certain types of decisions and predictions better than individuals or even experts, draws many parallels with statistical sampling; however, there is little overt discussion of statistics in the book

Its title is an allusion to Charles Mackay's Extraordinary Popular Delusions and the Madness of Crowds, published in 1841

Contents

  • 1 Types of crowd wisdom
  • 2 Four elements required to form a wise crowd
  • 3 Failures of crowd intelligence
  • 4 Connection
  • 5 Applications
    • 51 Prediction markets
    • 52 Delphi methods
    • 53 Human Swarming
  • 6 In popular culture
  • 7 Criticism
  • 8 See also
  • 9 References
  • 10 Further reading

Types of crowd wisdom

Surowiecki breaks down the advantages he sees in disorganized decisions into three main types, which he classifies as

  • Cognition
Thinking and information processing Market judgment, which he argues can be much faster, more reliable, and less subject to political forces than the deliberations of experts or expert committees
  • Coordination
Coordination of behavior includes optimizing the utilization of a popular bar and not colliding in moving traffic flows The book is replete with examples from experimental economics, but this section relies more on naturally occurring experiments such as pedestrians optimizing the pavement flow or the extent of crowding in popular restaurants He examines how common understanding within a culture allows remarkably accurate judgments about specific reactions of other members of the culture
  • Cooperation
How groups of people can form networks of trust without a central system controlling their behavior or directly enforcing their compliance This section is especially pro free market

Four elements required to form a wise crowd

Not all crowds groups are wise Consider, for example, mobs or crazed investors in a stock market bubble According to Surowiecki, these key criteria separate wise crowds from irrational ones:

Criteria Description
Diversity of opinion Each person should have private information even if it's just an eccentric interpretation of the known facts
Independence People's opinions aren't determined by the opinions of those around them
Decentralization People are able to specialize and draw on local knowledge
Aggregation Some mechanism exists for turning private judgments into a collective decision

Based on Surowiecki’s book, Oinas-Kukkonen captures the wisdom of crowds approach with the following eight conjectures:

  1. It is possible to describe how people in a group think as a whole
  2. In some cases, groups are remarkably intelligent and are often smarter than the smartest people in them
  3. The three conditions for a group to be intelligent are diversity, independence, and decentralization
  4. The best decisions are a product of disagreement and contest
  5. Too much communication can make the group as a whole less intelligent
  6. Information aggregation functionality is needed
  7. The right information needs to be delivered to the right people in the right place, at the right time, and in the right way
  8. There is no need to chase the expert

Failures of crowd intelligence

Surowiecki studies situations such as rational bubbles in which the crowd produces very bad judgment, and argues that in these types of situations their cognition or cooperation failed because in one way or another the members of the crowd were too conscious of the opinions of others and began to emulate each other and conform rather than think differently Although he gives experimental details of crowds collectively swayed by a persuasive speaker, he says that the main reason that groups of people intellectually conform is that the system for making decisions has a systematic flaw

Surowiecki asserts that what happens when the decision making environment is not set up to accept the crowd, is that the benefits of individual judgments and private information are lost and that the crowd can only do as well as its smartest member, rather than perform better as he shows is otherwise possible Detailed case histories of such failures include:

Extreme Description
Homogeneity Surowiecki stresses the need for diversity within a crowd to ensure enough variance in approach, thought process, and private information
Centralization The 2003 Columbia shuttle disaster, which he blames on a hierarchical NASA management bureaucracy that was totally closed to the wisdom of low-level engineers
Division The United States Intelligence Community, the 9/11 Commission Report claims, failed to prevent the 11 September 2001 attacks partly because information held by one subdivision was not accessible by another Surowiecki's argument is that crowds of intelligence analysts in this case work best when they choose for themselves what to work on and what information they need He cites the SARS-virus isolation as an example in which the free flow of data enabled laboratories around the world to coordinate research without a central point of control

The Office of the Director of National Intelligence and the CIA have created a Wikipedia-style information sharing network called Intellipedia that will help the free flow of information to prevent such failures again

Imitation Where choices are visible and made in sequence, an "information cascade" can form in which only the first few decision makers gain anything by contemplating the choices available: once past decisions have become sufficiently informative, it pays for later decision makers to simply copy those around them This can lead to fragile social outcomes
Emotionality Emotional factors, such as a feeling of belonging, can lead to peer pressure, herd instinct, and in extreme cases collective hysteria

Connection

At the 2005 O'Reilly Emerging Technology Conference Surowiecki presented a session entitled Independent Individuals and Wise Crowds, or Is It Possible to Be Too Connected

The question for all of us is, how can you have interaction without information cascades, without losing the independence that’s such a key factor in group intelligence

He recommends:

  • Keep your ties loose
  • Keep yourself exposed to as many diverse sources of information as possible
  • Make groups that range across hierarchies

Tim O'Reilly and others also discuss the success of Google, wikis, blogging, and Web 20 in the context of the wisdom of crowds

Applications

Surowiecki is a very strong advocate of the benefits of decision markets and regrets the failure of DARPA's controversial Policy Analysis Market to get off the ground He points to the success of public and internal corporate markets as evidence that a collection of people with varying points of view but the same motivation to make a good guess can produce an accurate aggregate prediction According to Surowiecki, the aggregate predictions have been shown to be more reliable than the output of any think tank He advocates extensions of the existing futures markets even into areas such as terrorist activity and prediction markets within companies

To illustrate this thesis, he says that his publisher is able to publish a more compelling output by relying on individual authors under one-off contracts bringing book ideas to them In this way they are able to tap into the wisdom of a much larger crowd than would be possible with an in-house writing team

Will Hutton has argued that Surowiecki's analysis applies to value judgments as well as factual issues, with crowd decisions that "emerge of our own aggregated free will astonishingly decent" He concludes that "There's no better case for pluralism, diversity and democracy, along with a genuinely independent press"

Applications of the wisdom-of-crowds effect exist in three general categories: Prediction markets, Delphi methods, and extensions of the traditional opinion poll

Prediction markets

Main article: Prediction market

The most common application is the prediction market, a speculative or betting market created to make verifiable predictions Surowiecki discusses the success of prediction markets Similar to Delphi methods but unlike opinion polls, prediction information markets ask questions like, “Who do you think will win the election” and predict outcomes rather well Answers to the question, "Who will you vote for" are not as predictive

Assets are cash values tied to specific outcomes eg, Candidate X will win the election or parameters eg, Next quarter's revenue The current market prices are interpreted as predictions of the probability of the event or the expected value of the parameter Betfair is the world's biggest prediction exchange, with around $28 billion traded in 2007 NewsFutures is an international prediction market that generates consensus probabilities for news events Intradecom, which operated a person to person prediction market based in Dublin Ireland achieved very high media attention in 2012 related to the US Presidential Elections, with more than 15 million search references to Intrade and Intrade data Several companies now offer enterprise class prediction marketplaces to predict project completion dates, sales, or the market potential for new ideas A number of Web-based quasi-prediction marketplace companies have sprung up to offer predictions primarily on sporting events and stock markets but also on other topics Those companies include Piqqem, Cake Financial, Covestor, Predictify, and the Motley Fool with its Fool CAPS product The principle of the prediction market is also used in project management software such as Yanomo to let team members predict a project's "real" deadline and budget

Delphi methods

Main article: Delphi method

The Delphi method is a systematic, interactive forecasting method which relies on a panel of independent experts The carefully selected experts answer questionnaires in two or more rounds After each round, a facilitator provides an anonymous summary of the experts’ forecasts from the previous round as well as the reasons they provided for their judgments Thus, participants are encouraged to revise their earlier answers in light of the replies of other members of the group It is believed that during this process the range of the answers will decrease and the group will converge towards the "correct" answer Many of the consensus forecasts have proven to be more accurate than forecasts made by individuals

Human Swarming

Designed as an optimized method for unleashing the wisdom of crowds, this approach implements real-time feedback loops around synchronous groups of users with the goal of achieving more accurate insights from fewer numbers of users Human Swarming sometimes referred to as Social Swarming is modeled after biological processes in birds, fish, and insects, and is enabled among networked users by using mediating software such as the UNU collective intelligence platform As published by Rosenberg 2015, such real-time control systems enable groups of human participants to behave as a unified collective intelligence When logged into the UNU platform, for example, groups of distributed users can collectively answer questions, generate ideas, and make predictions as a singular emergent entity Early testing shows that human swarms can out-predict individuals across a variety of real-world projections

In popular culture

Hugo-winning writer John Brunner's 1975 science fiction novel The Shockwave Rider includes an elaborate planet-wide information futures and betting pool called "Delphi" based on the Delphi method

Illusionist Derren Brown claimed to use the 'Wisdom of Crowds' concept to explain how he correctly predicted the UK National Lottery results in September 2009 His explanation was met with criticism on-line, by people who argued that the concept was misapplied The methodology employed was too, flawed; the sample of people, couldn’t have been totally objective and free in thought, because they were gathered multiple times and socialised with each other too much; a condition Surowiecki tells us is corrosive to pure independence and the diversity of mind required Surowiecki 2004:38 Groups thus fall into groupthink where they increasingly make decisions based on influence of each other and are thus less accurate However, other commentators have suggested that, given the entertainment nature of the show, Brown's misapplication of the theory may have been a deliberate smokescreen to conceal his true method

This was also shown in the television series East of Eden where a social network of roughly 10,000 individuals came up with ideas to stop missiles in a very short span of time

Wisdom of Crowds would have a significant influence on the naming of the crowdsourcing creative company Tongal, which is an anagram for Galton, the last name of the social-scientist highlighted in the introduction to Surowiecki’s book John Galton recognized the ability of a crowd’s averaged weight-guesses for oxen to exceed the accuracy of experts

Criticism

In his book Embracing the Wide Sky, Daniel Tammet finds fault with this notion He explains that this notion may work in the Who Wants to be a Millionaire scenario because audience members have various levels of knowledge that can be coordinated to provide a correct answer in aggregate: Some persons will know the correct answer, others will know what are not the right answers and some will have no clue Those who know the right answer will choose it, and the others will choose among what might seem the possible answers The result will be to give a slight edge to the correct answer, even if only a few actually know the correct answer

However, Tammet points out the potential for problems in systems which have less well defined means of pooling knowledge: Subject matter experts can be overruled and even wrongly punished by less knowledgeable persons in systems like Wikipedia, citing a case of this on Wikipedia Furthermore, Tammet mentions the assessment of the accuracy of Wikipedia as described in a study mentioned in Nature in 2005, outlining several flaws in the study's methodology which included that the study made no distinction between minor errors and large errors

Tammet also cites the Kasparov versus the World, an online competition that pitted the brainpower of tens of thousands of online chess players choosing moves in a match against Garry Kasparov, which was won by Kasparov, not the "crowd" which was not "wise" according to Surowiecki's criteria

In his book You Are Not a Gadget, Jaron Lanier argues that crowd wisdom is best suited for problems that involve optimization, but ill-suited for problems that require creativity or innovation In the online article Digital Maoism, Lanier argues that the collective is more likely to be smart only when

1 it isn't defining its own questions, 2 the goodness of an answer can be evaluated by a simple result such as a single numeric value, and 3 the information system which informs the collective is filtered by a quality control mechanism that relies on individuals to a high degree

Lanier argues that only under those circumstances can a collective be smarter than a person If any of these conditions are broken, the collective becomes unreliable or worse

See also

  • Argumentum ad populum
  • Bandwagon effect
  • Central limit theorem
  • Collaborative filtering
  • Collarity
  • Collective intelligence
  • Crowdfunding
  • Crowdsourcing
  • Dotmocracy
  • Dumb agent theory
  • Efficient-market hypothesis
  • Global brain
  • The Good Judgment Project
  • Iowa Electronic Markets
  • Open-source governance
  • Problem solving
  • Wideband delphi

References

  1. ^ Introduction page XII: Although Surowiecki's description of the "averaging" calculation page XIII implies that Galton first calculated the mean, inspection of the original 1907 paper indicates that Galton considered the median the best reflection of the crowd's estimate Galton, Francis 1907-03-07 "Vox Populi" PDF Nature doi:101038/075450a0 the middlemost estimate expresses the vox populi  Galton's quotation from the end of this paper given by Surowiecki on page XIII actually refers to the surprising proximity of the median and the measurement, and not to the much closer agreement of mean and measurement which is the context Surowiecki gives it in The mean only 1 pound, rather than 9, from the ox's weight was only calculated in Galton's subsequent reply to a letter from a reader, though he still advocates use of the median over any of the "several kinds" of mean Galton, Francis 1907-03-28 "Letters to the Editor: The Ballot-Box" Nature 75 1952 doi:101038/075509e0 my proposal that juries should openly adopt the median when estimating damages, and councils when estimating money grants, has independent merits of its own ; he thinks the median, which is analogous to the 50% +1 vote, particularly democratic
  2. ^ Recent research in the Galton Archive at University College, London, has found some small discrepancies between the original data and the results printed in Galton's articles, such that the mean estimate exactly coincides with the correct weight of the dressed ox Had he known the true outcome, Surowiecki's conclusion on the wisdom of the Plymouth crowd would no doubt have been more strongly expressed Wallis, KF 2014, "Revisiting Francis Galton's forecasting competition", Statistical Science, 29, 420-424 doi: 101214/14-STS468
  3. ^ Surowiecki, James 2005 The Wisdom of Crowds Anchor Books pp xv ISBN 0-385-72170-6 
  4. ^ Oinas-Kukkonen, Harri 2008 Network analysis and crowds of people as sources of new organisational knowledge In: A Koohang et al Eds: Knowledge Management: Theoretical Foundation Informing Science Press, Santa Rosa, CA, US, pp 173-189
  5. ^ "The Wisdom of Crowds" Siversorg Retrieved 30 July 2012  by Derek Sivers
  6. ^ Sushil Bikhchandani, David Hirshleifer, Ivo Welch October 1992 "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades" Journal of Political Economy, Vol 100, No 5, pp 992-1026
  7. ^ Independent Individuals and Wise Crowds, or Is It Possible to Be Too Connected at the 2005 Emerging Technology Conference
  8. ^ "O'Reilly - What Is Web 20" Oreillycom 2005-09-30 Retrieved 2012-08-24 
  9. ^ Hutton, Will 2005-09-18 "Comment: The crowd knows best" London: Guardian Unlimited Retrieved 2007-11-14 
  10. ^ http://siteslsaumichedu/collectiveintelligence/wp-content/uploads/sites/176/2015/05/Rosenberg-CI-2015-Abstractpdf
  11. ^ https://mitpressmitedu/sites/default/files/titles/content/ecal2015/ch117html
  12. ^ http://newsdiscoverycom/human/life/swarms-of-humans-power-a-i-platform-150603htm
  13. ^ http://unanimousaicom/swarms-are-smart-its-kinda-scary/
  14. ^ https://wwwcsyorkacuk/nature/ecal2015/paper-40html
  15. ^ Dimartino-Marriott, Martin 2009-09-15 "Comment: Derren Brown's Interpretation of the Wisdom of Crowds" MartinBlueprintcouk Retrieved 2010-01-06 
  16. ^ "Brown Lotto trick 'confuses' fans" BBC News 2009-09-12 Retrieved 2009-09-13 
  17. ^ "Derren Brown Lottery Trick YouTube Video By Cyriak Harris Appears To Show Split Screen Behind Stunt" Sky News Retrieved 2010-02-16 
  18. ^ Rapkin, Mickey April 17, 2014 "Crowdsourcing Site Tongal Awards Its Winning Ad Pitches" Bloomberg Retrieved 2015  Check date values in: |access-date= help

Further reading

  • Bikhchandani, Sushil, David Hirshleifer, and Ivo Welch "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades" Journal of Political Economy, Vol 100, No5, pp 992–1026, 1992
  • Ivanov, Kristo 1972 Quality-control of information: On the concept of accuracy of information in data banks and in management information systems: The University of Stockholm and The Royal Institute of Technology Doctoral diss Diss Abstracts Int 1974, Vol 35A, 3, p 1611-A Nat Techn Info Service NTIS order No PB-219297
  • Johnson, Steven, Emergence: The Connected Lives of Ants, Brains, Cities, and Software 2002 Scribner, ISBN 0-684-86876-8
  • Le Bon, Gustave 1895, The Crowd: A Study of the Popular Mind Available from Project Gutenberg at University of Pennsylvania
  • Lee, Gerald Stanley 1913 Crowds A moving-picture of democracy Doubleday, Page & Company Available from Project Gutenberg
  • Oinas-Kukkonen, Harri 2008 Network analysis and crowds of people as sources of new organisational knowledge In: A Koohang et al Eds: Knowledge Management: Theoretical Foundation Informing Science Press, Santa Rosa, CA, US, pp 173–189
  • Shirky, Clay 2009 Here Comes Everybody: The Power of Organizing Without Organizations Penguin
  • Sunstein, Cass, Infotopia: How Many Minds Produce Knowledge 2006 Oxford University Press, ISBN 0-19-518928-0
  • Tarde, Gabriel 2001, orig 1901 L'opinion et la foule BookSurge Publishing, ISBN 0-543-97083-3
  • L Fisher, The Perfect Swarm : The Science of Complexity in Everyday Life, Basic Books, 2009
  • S Roy Chowdhury, C Rodriguez, F Daniel, F Casati Wisdom-aware computing: on the interactive recommendation of composition knowledge ICSOC'10 Proceedings of the 2010 international conference on Service-oriented computing, Springer-Verlag, San Francisco, CA, USA

the wisdom of crowds, the wisdom of crowds book, the wisdom of crowds by james surowiecki, the wisdom of crowds chapter summaries, the wisdom of crowds quotes, the wisdom of crowds review, the wisdom of crowds spark notes, the wisdom of crowds summary, the wisdom of crowds torrent, the wisdom of crowds wiki


The Wisdom of Crowds Information about

The Wisdom of Crowds


  • user icon

    The Wisdom of Crowds beatiful post thanks!

    29.10.2014


The Wisdom of Crowds
The Wisdom of Crowds
The Wisdom of Crowds viewing the topic.
The Wisdom of Crowds what, The Wisdom of Crowds who, The Wisdom of Crowds explanation

There are excerpts from wikipedia on this article and video

Random Posts

Timeline beyond October following the September 11 attacks

Timeline beyond October following the September 11 attacks

The following list contains certain dates beyond October 2001 involving the September 11 attacks ...
Smash Hits

Smash Hits

Smash Hits was a pop music magazine, aimed at teenagers and young adults and originally published in...
2014–15 USC Trojans women's basketball team

2014–15 USC Trojans women's basketball team

The 2014–15 USC Trojans women's basketball team will represent University of Southern California dur...
Trademark classification

Trademark classification

A trademark classification is a way the trademark examiners and applicants' trademark attorneys arra...