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James Surowiecki. The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economics, Societies and Nations. New York: Doubleday, 2004, 296 pages, $24.95 hardcover.
Surowiecki, a staff writer for the New Yorker, begins The Wisdom of Crowds with an anecdote involving Sir Francis Galton, the founder of differential psychology. After watching a weight-judging competition at a livestock fair in the fall of 1906, Galton was surprised to discover that the average of the individual guesses of the crowd accurately predicted the weight of an ox. In fact, the group average was closer to the ox's actual weight than most the individual guesses of the crowd members, including cattle experts, farmers, and butchers.
Gallon posited that when individual judgments of group members are aggregated, they can be very accurate, often more so than the most intelligent members. In his book, Surowiecki uses findings such as Gallon's (primarily from psychology and economics) to explore implications of lhe concepl that large groups are more intelligent than the select few. The aggregation of information in groups, therefore, can result in decisions that are far superior to decisions made by individual members of that group. The group, however, is not necessarily more intelligent than every individual member-some individuals may be smarter, for example, when stock market decisions are involved. It is unusual, however, that a particular individual will be as consistently accurate as the group. There are some similarities between this idea and statistical sampling theory that is, that a random sample of individuals will be more representative of the population of possible outcomes, thus resulting in better predictions.
When a crowd consists of diverse, independent, decentralized individuals, their aggregated responses will be more accurate than even the predictions of experts. Surowiecki presents a number of anecdotes to...