The Wisdom of Crowds explores why, and under which circumstances, groups of people can come up with better solutions to problems than any one person – even if that person is an expert. By analyzing the way individuals and groups make decisions, the book gets to the bottom of the wisdom of crowds, and shows how this wisdom can be used to make reliable decisions.
At a livestock fair in 1906, scientist Francis Galton observed visitors taking part in a contest to guess an ox’s weight in pounds. The results were surprising: although no individual, including cattle experts, could guess the ox’s exact weight, the mean value of all the visitors’ estimations was a mere pound more than the animal’s actual weight. In other words, the collective estimation was far more accurate than any individual one.
Galton had discovered how a group of people was, indeed, wiser than each of its individual members (including experts).
The television show Who Wants to be a Millionaire? is another example of this phenomenon. Candidates on the show have to answer round after round of multiple-choice questions to win the prize and, in the process, can turn to "lifelines" for help. They can use the Ask-the-Expert lifeline to call up an expert for advice, or the Ask-the-Audience lifeline to find out the audience’s opinion. One analysis showed that only 65 percent of the experts were right, while 91 percent of the crowd’s votes were right.
However, a quick glance at history could confirm that not all groups are wise: we witness raging crowds, violent mobs and mindless herd behavior all too often. As Friedrich Nietzsche once wrote, “Madness is rare in individuals – but in groups, parties, nations and ages it is the rule.”
Of course, there are also errors in collective intelligence that can lead a group to make faulty decisions. But if the group manages to stay diverse, work as a team and foster open dialogues, the “wisdom of crowds” is not a meaningless cliché, but actually – as the examples above have shown – the surprising truth.
Big groups can solve problems better than individuals.