Wednesday, August 24, 2011

The Wisdom of Crowds

Surowiecki, J. (2004) The Wisdom of Crowds. Abacas.

Summary: -

Surowiecki’s premise is that given the right conditions groups, both large and small, can exhibit a collective intelligence that exceeds that of even the ‘smartest’ individual within that group – he refers to this idea as the ‘wisdom of crowds’. Basically, any diverse, independent, decentralised group which has some mechanism to aggregate its collective knowledge will, for reasons he explains, consistently demonstrate better judgment than could have been achieved by any single ‘expert’ within the group. Surowiecki analyses the conditions needed for crowds to be ‘smart’, and in contrast looks at some factors that can prevent this from happening.

He develops the idea of how the ‘market forces’ that can spontaneously exist within a crowd (group) can produce an efficient decision making process – giving as one example, the efficacy of ‘decision markets’ in making complex predictions. Organisations, he suggests, could make better use of the ‘wisdom of crowds’, as opposed to other strategies such as chasing the ‘expert’.

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