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 09:34:09 -0800

MOBS RULE

Writer, James Surowiecki, makes the
case for unlikely notion that the
many are smarter than the few;

THE WISDOM OF CROWDS:
Why the Many Are Smarter Than the Few
and How Collective Wisdom Shapes
Business, Economies, Societies, and Nations.

IN 1906 the English scientist Francis Gaston visited a country
livestock fair and stumbled upon an intriguing contest. An ox was on
display, and villagers were invited to guess the animal's weight after
slaughtering and dressing. Nearly 800 of them gave it a go, and not
surprisingly not one hit the exact mark: 1,198 pounds. Astonishingly,
however, the average of those 800 guesses came close - very close
indeed. It was 1,197 pounds.

This anecdote captures the striking thesis of James Surowiecki's The
Wisdom of Crowds. "[U]nder the right circumstances," Surowiecki argues,
"groups are remarkably intelligent, and are often smarter than the
smartest people in them." For evidence he cites how groups have been
used to find lost submarines, correct the spread on sporting events,
locate Web pages, even predict who will be elected president of the
United States. So why aren't we using groups more?

For one thing, crowds have a pretty bad rep. Crowds have ignited
lynchings, financial panics and styling trends like the mustache or
jock-hawk.

Furthermore, as Surowiecki notes, corporate structure is enthralled by
the idea of expertise. Strategy consultants demand $200 an hour to tell
companies what to do. Top executives rake in eight-figure salaries to
rescue sinking ships. To accept that the masses might know something
would mean radically altering how our country operates.

As counterintuitive as it sounds, however, groupthink works so long as
Surowiecki's three key criteria - independence, diversity and
decentralization - are satisfied. If you ask a large enough group to
make a prediction or estimate a probability, he writes, the errors
individuals make cancel each other out. "Subtract the error, and you're
left with the information." In this fashion the TV studio audience of
Who Wants to Be a Millionaire guessed the right answer to questions 91
percent of the time; "experts" guessed right only 65 percent of the
time.

Make no mistake, Surowiecki is a business columnist for the New Yorker
magazine, and The Wisdom of Crowds packs more textbook terms than an
economics primer. One need not be a CEO or amateur stock trader to
appreciate this book, but a certain patience with lingo does help.

Overall, however, Surowiecki is a patient and vivid writer with a knack
for culling entertaining examples. To demonstrate the importance of
diversity on group wisdom, he describes how NFL head coaches continue
to kick field goals when, statistics have shown, they are better off
going for it. Coaches come from similar backgrounds and work in similar
situations, and this leads to a group of risk-averse decision-makers.
The result? They think inside the proverbial box.

The application of group wisdom stretches far beyond football games,
though, which is why this book is not just revolutionary but essential
reading for all types of people. Take national security. In one
section, Surowiecki describes how the United States blundered into the
Bay of Pigs invasion because the decision-making group - the
president and his advisers - all shared similar conceptions and
assumptions. In short, the group lacked diversity and as a result
demonstrated a colossal example of the failings of groupthink.

The Wisdom of Crowds is likely to raise a certain amount of controversy
and not just because of Surowiecki's counterintuitive thesis. In one
section Surowiecki encourages the intelligence community to revisit the
idea of using futures markets - where people bet on impending
disasters - to enhance homeland security.

Still, there is something hopeful about Surowiecki's grand idea. One
need only read the lengthy subtitle to appreciate the whiff of populism
here. New York, Boston and Los Angeles might remain our nation's
cultural capitals, Surowiecki suggests, but the rest of the madding
crowd might know a thing or two. If for that reason alone, one hopes
the group approves of Surowiecki's book - and in a big way.

John Freeman is a writer in New York.
http://www.chron.com/cs/CDA/ssistory.mpl/ae/books/reviews/2658031

Relevant Pages

  • Re: teaching a child - console or GUI
    ... >>Surowiecki is convincing on the idea that the intelligence of Google, ... >>the fact that they're tapping into collective wisdom. ... Well, for one, crowds have a pretty bad rep. ...
    (comp.lang.pascal.delphi.misc)
  • Re: WISDOM of Crowds (Iden?ify -Uare the missing data)
    ... How did you discover the wisdom of crowds? ... like bettors on a horse race or investors in the stock market. ... opinions into one collective verdict. ...
    (sci.logic)
  • Re: ot:The wisdom of crowds
    ... crowds of all sorts were ... like bettors on a horse race or investors in the stock market. ... > opinions into one collective verdict. ... > paradox of the wisdom of crowds is that the best group decisions come ...
    (alt.guitar.amps)
  • ot:The wisdom of crowds
    ... How did you discover the wisdom of crowds? ... like bettors on a horse race or investors in the stock market. ... opinions into one collective verdict. ...
    (alt.guitar.amps)
Quantcast