Re: WISDOM of Crowds (Iden?ify -Uare the missing data)

From: Immortalist (reanimater_2000_at_yahoo.com)
Date: 03/15/05 

Date: 15 Mar 2005 09:31:16 -0800

"The problem with the global village is all the global village idiots."
-- Paul Ginsparg

"You don't do good software design by committee."
-- Donald Norman

"There's no justice like angry-mob justice."
-- Principal Seymour Skinner

"A person is smart. People are stupid."
-- Agent K

The wisdom of crowds you say? As Surowiecki explains, yes, but only
under the right conditions. In order for a crowd to be smart, he says
it needs to satisfy four conditions:

1. Diversity. A group with many different points of view will make
better decisions than one where everyone knows the same information.
Think multi-disciplinary teams building Web sites...programmers,
designers, biz dev, QA folks, end users, and copywriters all
contributing to the process, each has a unique view of what the final
product should be. Contrast that with, say, the President of the US and
his Cabinet.

2. Independence. "People's opinions are not determined by those around
them." AKA, avoiding the circular mill problem.

3. Decentralization. "Power does not fully reside in one central
location, and many of the important decisions are made by individuals
based on their own local and specific knowledge rather than by an
omniscient or farseeing planner." The open source software development
process is an example of effect decentralization in action.

4. Aggregation. You need some way of determining the group's answer
from the individual responses of its members. The evils of design by
committee are due in part to the lack of correct aggregation of
information. A better way to harness a group for the purpose of
designing something would be for the group's opinion to be aggregated
by an individual who is skilled at incorporating differing viewpoints
into a single shared vision and for everyone in the group to be aware
of that process (good managers do this). Aggregation seems to be the
most tricky of the four conditions to satisfy because there are so many
different ways to aggregate opinion, not all of which are right for a
given situation.

Satisfy those four conditions and you've hopefully cancelled out some
of the error involved in all decision making:

If you ask a large enough group of diverse, independent people to make
a prediciton or estimate a probability, and then everage those
estimates, the errors of each of them makes in coming up with an answer
will cancel themselves out. Each person's guess, you might say, has two
components: information and error. Subtract the error, and you're left
with the information.

The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How
Collective Wisdom Shapes Business, Economies, Societies and Nations
 --by James Surowiecki (Author)

http://www.amazon.com/exec/obidos/tg/detail/-/0385503865/

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...

Why is the line in which you're standing always the longest?

Why is it that you can buy a screw anywhere in the world and it will
fit a bolt bought ten-thousand miles away?

Why is network television so awful?

If you had to meet someone in Paris on a specific day but had no way of
contacting them, when and where would you meet?

Why are there traffic jams?

What's the best way to win money on a game show?

Why, when you walk into a convenience store at 2:00 A.M. to buy a quart
of orange juice, is it there waiting for you?

What do Hollywood mafia movies have to teach us about why corporations
exist?

What does guessing the weight of an ox at a country fair have to do
with the 9/11 attacks?

How does a flock of birds relate to a traffic jam?

Why doesn't collective wisdom believe in collective wisdom?

Explores these and other questions and explainations about how groups
of people, in specific kinds of circumstances, can reach intelligent,
accurate decisions that can then go horribly wrong.

---------------------------------

While our culture generally trusts experts and distrusts the wisdom of
the masses, under the right circumstances, groups are remarkably
intelligent, and are often smarter than the smartest people in them.

To support this almost counterintuitive proposition, Surowiecki
explores problems involving cognition (we're all trying to iden?ify a
correct answer), coordination (we need to synchronize our individual
activities with others) and cooperation (we have to act together
despite our self-interest).

His rubric, then, 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.

If four basic conditions are met, a crowd's "collective intelligence"
will produce better outcomes than a small group of experts, Surowiecki
says, even if members of the crowd don't know all the facts or choose,
individually, to act irrationally. "Wise crowds" need;

(1) diversity of opinion;

(2) independence of members from one another;

(3) decentralization; and

(4) a good method for aggregating opinions.

The diversity brings in different information; independence keeps
people from being swayed by a single opinion leader; people's errors
balance each other out; and including all opinions guarantees that the
results are "smarter" than if a single expert had been in charge.

...an interesting twist on the long held notion that Americans
generally question the masses and eschew groupthink.

...the TV studio audience of Who Wants to Be a Millionaire guesses
correctly 91 percent of the time, compared to "experts" who guess
only 65 percent correctly. Keep up the good work, comrades.

Relevant Pages

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