Economics : The Wisdom of Crowds

The Wisdom of Crowds

EUR 8,02


Smart people often believe that the opinion of the crowd is always inferior to the opinion of the individual specialist. Philosophical giants such as Nietzsche thought that Madness is the exception in individuals but the rule in groups. Henry David Thoreau lamented: The mass never comes up to the standard of its best member but on the contrary degrades itself to a level with the lowest member. The motto of the great and the ordinary seems to be: Bet on the expert because crowds are generally stupid and often dangerous. Business columnist James Surowiecki’s new book The Wisdom of Crowds explains exactly why the conventional wisdom is wrong. The fact is that, under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them. Groups don’t even need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision. Why? Because, as it turns out, if you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out. Not any old crowd will do of course. For the crowd to be wise it has to satisfy four specific conditions, but once those conditions are met, its judgment is likely to be accurate. Surowieki concentrates on three kinds of problems. The first are cognition problems (problems that are likely to have definitive answers, such as: How many books will Amazon sell this month?). The second are problems of coordination (problems requiring members of a group to figure out how to coordinate their behaviour with one another) and the third are problems of cooperation (getting self-interested, distrustful people to work together-- despite their selfishness). The brilliant first half of the book illustrates this theory with practical examples. The second half of the book essentially consists of case studies with each chapter talking about the way collective intelligence either flourishes or flounders. Much of this part deals with business topics such as corporations, markets and the dynamics of a stock-market bubble. Surowieki has an engaging, direct style defending his surprising central thesis in entertaining ways by, for example, talking about laying bets on football games and political elections, traffic jams, Google, the Challenger explosion and the search for a missing submarine. The Wisdom of Crowds is an entertaining book making a serious point and by the end of the superb first half the reader has been made to accept that, while with most things, the average is mediocrity, when it comes to decision-making the average results in excellence. --Larry Brown

Wisdom you should really think about! - the bad news: surowiecki s thoughts fill 370 pages. the good news: you only have to read the first half. the bad news: you have to read it! the good news: it will change your attitude. the wisdom of crowds lectures about the benefits of decision making in groups instead of individual decision making (because the latter is mostly literally single-minded , if not he s an inmate).additionally to its impact on our everyday life, the book covers the benefits and pitfalls of decision making in corporations: corporate strategy is all about collecting information from many different sources, evaluating the probabilities of potential outcomes, and making decisions in the face of an uncertain future.i just quote a few lines, which struck me, because they contradict the daily business of almost every company you bump in out there.diversity helps because it actually adds perspectives that otherwise would be absent and because it takes away, or at least weakens, some of the destructive characteristics of group decision making. (eg. groupthink)fostering diversity is actually more important in small groups and in formal organizations ......... diversity is, on its own, valuable, so that the simple fact of making a group diverse makes it better at problem solving....... groups that are too much alike find it harder to keep learning, because each member is bringing less and less new information to the table.... when decision makers are too much alike - in worldview and mind-set - they easily fall prey to groupthink. ... (the important thing about groupthink is that it works not so much by censoring dissent as by making dissent seem somehow improbable.)... the more personal contact they have with each other, the less likely it is that the group decisions will be wise ones....diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.now imagine the normal and average management meeting: every member (90% are men) born in the company, never seen something else outside, never challenged by the market, never trained in leadership, or strategy, never gained client- or marketing experience let alone -expertise.why don t they change, why don t they grow?because they share an illusion of invulnerability, a willingness to rationalize away possible counterarguments to the groups position, and a conviction that dissent is not useful.what makes their fewer and fewer successes in the past even less likely to be turned into true and sustainable success in the future.

Most remarkable book of 2005 - This books shows how crowds can take much wiser decisions than so called experts.In this way the books lays the basis why democracy leads to better decisions and government than the current particratic regimes, which dominate still today in Europe.The book explains also how markets work.In addition the book is not blind for the pitfalls.Under certain conditions democracy and markets are not wise. How this occurs and why is also explained in the book.This book is for me the most remarkeable book of 2005.

Enjoyed this - I bought this book out of curiosity and because I always believed that the cleverest of all should be allowed to decide and not necessarily be questioned or debated by others who were less informed. I am glad I did follow my curiosity and wanted to say that the examples given in this book and the way this question was exposed made me think again. It also slightly steps into the question of if and how the wisdom of the crowds works in societies that are not entirely democratic (are in the middle of a transition).Personally I found it thought provoking and very interesting, and it did leave me with a good taste in my mind. Five stars for a book that stayed on my mind.

Verlasst euch nicht auf die Experten! - Ganz so einfach ist es nicht. In dem Buch The Wisdom of Crowds wird an vielen Beispielen dargestellt, dass es sein kann, dass eine Gruppenentscheidung einer Expertenentscheidung überlegen ist. Dies trifft überraschenderweise auch auf Fragestellungen zu, die gemeinhin als nur von Experten zu beantworten angesehen werden.In dem Buch wird ebenfalls erläutert, wie diese Überlegungen auf Entscheidungsprozesse in dem eigenen Umfeld z.b. Beruf eingesetzt werden können. Mich selbst hat dieses Buch angeregt, darüber nachzudenken, wie die Abschlusswahrscheinlichkeiten im Verkauf besser geschätzt werden können.Hinzu kommt, dass der Schreibstil so eingängig ist, dass dieses Buch sich sehr leicht lesen lässt.




The Wisdom of Crowds