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:

    But all subsists by elemental strife;
    And Passions are the elements of Life.
    Alexander Pope (1688–1744)

    The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run.
    Henry David Thoreau (1817–1862)

    Is civilization only a higher form of idolatry, that man should bow down to a flesh-brush, to flannels, to baths, diet, exercise, and air?
    Mary Baker Eddy (1821–1910)

    The wise guys
    tell me
    that Christmas
    is Kid Stuff . . .
    Frank Horne (b. 1899)

    A body of work such as Pasteur’s is inconceivable in our time: no man would be given a chance to create a whole science. Nowadays a path is scarcely opened up when the crowd begins to pour in.
    Jean Rostand (1894–1977)