The Wisdom of Crowds - Four Elements Required To Form A Wise Crowd

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.

Read more about this topic:  The Wisdom Of Crowds

Famous quotes containing the words elements, required, form, wise and/or crowd:

    “A party of order or stability, and a party of progress or reform, are both necessary elements of a healthy state of political life.”
    —John Stuart Mill (1806–1873)

    “Someday soon, we hope that all middle and high school will have required courses in child rearing for girls and boys to help prepare them for one of the most important and rewarding tasks of their adulthood: being a parent. Most of us become parents in our lifetime and it is not acceptable for young people to be steeped in ignorance or questionable folklore when they begin their critical journey as mothers and fathers.”
    —James P. Comer (20th century)

    “Whenever, therefore, people are deceived and form opinions wide of the truth, it is clear that the error has slid into their minds through the medium of certain resemblances to that truth.”
    —Socrates (469–399 B.C.)

    “This fellow is wise enough to play the fool,
    And to do that well craves a kind of wit.
    He must observe their mood on whom he jests,
    The quality of persons, and the time,
    Not, like the haggard, check at every feather
    That comes before his eye. This is a practice
    As full of labor as a wise man’s art.”
    —William Shakespeare (1564–1616)

    “For a crowd is not company; and faces are but a gallery of pictures; and talk but a tinkling cymbal, where there is no love.”
    —Francis Bacon (1561–1626)