I enjoyed this book. The book develops the premise that crowds, under the right circumstances, can make extraordinarily good decisions. He make a number of studies showing the average of all people's inputs is surprisingly more accurate than the best member of the crowd. He also touches on when this crowd wisdom breaks down, citing such occasions as the stock market bubble, housing bubbles, and mob rule. The breakdown of crowd wisdom is only touched on, and if I have one complaint about the book, its that this is an important aspect of crowd wisdom and deserves more attention. ( )

I included this book in my book: The 100 Best Business Books of All Time. www.100bestbiz.com. ( )

Enjoyed it - well written and intelligent with lots of interesting examples on how, given the right conditions, crowds can come up with some surprisingly good answers. Slightly put off by the impression that the real mission of the book was some sort of corporate training day on how to use this to improve your business.... ( )

So far, so good. ( )

When I first heard about this book, I was somewhat skeptical. Most of the examples given suggested that the aggregate opinion of a test sample might reflect or predict the OPINION of another group (e.g. an opinion poll predicting the Oscars) but not a physical fact. However, several examples in this book showed that a "crowd" could be right about physical facts too, like the weight of a pig, the number of beans in a bar , the whereabouts of a sunken vessel and even responsibility for the first space shuttle disaster.

This does not mean that a crowd can formulate - or even choose between - advanced scientific theories. But their aggregate wisdom can reflect underlying reality in a vast range of circumstances. This has implications for many areas of human activity.

This book does well to give a number of examples. It even shows the limitations of collective wisdom, as when people act like sheep instead of independently - giving rise to such phenomena as stock market bubbles. But I couldn't help feeling that it was built up into a completely coherent picture. the author instead simply went on at great length in those cases where he had a lot of information and in brief when he had only a limited amount of information.

What I felt was needed was a more rigorous and structured approach as to when and how to apply the wisdom of crowds.

One point on which Surowiecki is wrong was in his comparison of right answers by members of the audience and "expert" friends in the TV quiz show WHO WANTS TO BE A MILLIONAIRE. He writes: "it's possible, though not likely, that the audiences were asked easier questions. " His assumption that it is unlikely is quite arbitrary. First of all the audience tends to be asked more on the earlier questions which are presumed to be easier (according to the way the game is devised).

Also, the questions that are put to the audience are usually questions about popular culture (TV shows, movies and popular music) which one would be expect to be well known precisely amongst the kind of people who are likely to attend a TV studio as members of the audience. The phone-a-friend lifeline was usually saved for questions that had nothing to do with popular culture.

That said, the book does illustrate a certain widespread phenomenon that can be tapped or harnessed by businesses and social reformers alike. ( )

Interesting book. Finally read it in 2007 even though the ideas in the book have had a significant impact on the strategy for the foresight team at Arup.
I liked the examples and found myself agreeing with the statements being made. HOWEVER i was looking forward to some kind of conclusions that might draw together the observations - but the book (or is it a series of column articles?) just ended. ( )

The Wisdom of Crowds (2004) by James Surowiecki challenges the notion that experts know the best answer to everything. Instead, large groups of people often can come closer to the correct answers in problems whether it be the average guess of the weight of a pig, or the location of a wrecked submarine in the ocean. Surowiecki applies his theory through a series of entertaining anecdotes related to law, elections, intelligence, gambling, traffic, scientific collaboration, small groups, corporations, markets, and democracy.

The author breaks down three types of crowd knowledge: cognition, coordination and cooperation. He also finds four keys required for crowds to be wise: diversity of opinion, independence, decentralization, and aggregation. The lack of aggregation in particular is often the reason why crowd knowledge is seen as lacking by some and furthering a move toward centralization, such as the inability of US intelligence agencies to stop terrorist attacks on American soil (because they had not aggregated knowledge from diverse sources).

Surowiecki is particularly fond of free markets, and illustrates their advantages in way that can be convincing to a left-leaning "anticapitalist" like myself. Particularly interesting is the Iowa Electronic Markets which have been highly accurate in predicting everything from Presidential elections to Academy Awards because the participants are betting on outcomes not selecting preferences.

It was a very interesting book and interesting follow-up to reading Emergence: The Connected Lives of Ants, Brains, Cities, and Software and Sync: The Emerging Science of Spontaneous Order. Of course, I can't read a book without learning about other books and these books mentioned in the text look interesting:

• William H. White, City


• Capitalism, Democracy, and Ralph's Pretty Good Grocery by John E. Mueller

Favorite Passages

Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise. An intelligent group, especially when confronted with cognition problems, does not ask its members to modify their positions in order to let the group reach a decision everyone can be happy with. Instead, if figures out how to use mechanisms -- like market prices, or intelligent voting systems -- to aggregate and produce collective judgments that represent not what any one person in the group thinks but rather, in some sense, what they all think. Paradoxically, the best way for a group to be smart is for each person in it to think and act as independently as possible. - p. xix
What [Henry] Oldenburg grasped was the peculiar character of knowledge, which does not, unlike other commodities, get used up as it is consumed and which can be therefore spread widely without losing its value. If anything, in fact, the more a piece of knowledge becomes available, the more valuable it potentially becomes, because of the wider array of possible uses for it. - p. 166-67
Author : Surowiecki, James, 1967-
Title : The wisdom of crowds : why the many are smarter than the few and how collective wisdom shapes business, economies, societies, and nations / James Surowiecki.
Edition : 1st ed.
Published : New York : Doubleday : 2004. ( )

This is fab ( )

Terrific book!

I like it when a book uses points-of-reference that I immediately recognize in order to draw conclusions.

Mike Martz, Moneyball, The Tipping Point, and Linux are all things that I know something about; So, it doesn't take a lot of reorienting myself to understand the author's argument. ( )

A Counter-Intuitive Notion

In 1906, Francis Galton, known for his work on statistics and heredity, came across a weight-judging contest at the West of England Fat Stock and Poultry Exhibition. This encounter was to challenge the foundations of his life’s study.

An ox was on display and for six-pence fair-goers could buy a stamped and numbered ticket, fill in their names and their guesses of the animal’s weight after it had been slaughtered and dressed. The best guess received a prize.

Eight hundred people tried their luck. They were diverse. Many had no knowledge of livestock; others were butchers and farmers. In Galton’s mind this was a perfect analogy for democracy. He wanted to prove the average voter was capable of very little. Yet to his surprise, when he averaged the guesses, the total came to 1197 pounds. After the ox had been slaughtered, it weighted 1198.

James Surowiecki takes Galton’s counterintuitive notion and explores its ramification for business, government, science and the economy. It is a book about the world as it is. At the same time, it is a book about the world as it might be. Most of us believe that valuable nuggets of knowledge are concentrated in few minds. We believe the solution to our complex problems lies in finding the right person. When all we have to do, Surowiecki demonstrates over and over, is ask the gathered crowd.

The well-written book is divided into two parts. The first deals with theory; the second offers case studies. Believe it or not, I found it to be a page-turner. The author has that precious ability to render the complex in simple, understandable and interesting prose.

I have long been an admirer of H. L. Mencken who once wrote, “No one is this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people.”

By the time I finished this book, I believed Mencken was wrong. ( )

Interesting and well-written, although it seems to loose focus in the end. ( )

Except for the last chapter, I loved this book. An amazing perspective on how and when more heads are better than one. Oddly enough, the book as a whole increased my faith in our (American) political process, while the last chapter seemed to take a dim view of democracy. Well worth the read just the same (and the audiobook was well done, too). ( )

Collective Wisdom
Information Cascade
Thomas Schelling: Nobel Prize winning American economist
The Organization Man by William H. Whyte
Complex Mutually Beneficial Outcome
Schelling Point.
Tacid Knowledge

Companies are not tapping into the collective knowledge of their employees. Wisdom of crowds depends on three principle: diversity,decentralization, independance. Group intelligense is always greater than or equal to the intelligence of the smartest member.
You should deliver all information concerning a matter at once instead of piece meal in order for the crowd to make good decision. A group of unsophisticated individuals can make very accurate decisions as a group. Schelling point is the common point of understand of a group; not need for coordination.
In game theory, a Schelling point (also called focal point) is a solution that people will tend to use in the absence of communication, because it seems natural, special or relevant to them. Expertise and accuracy are unrelated; an expert in one field does not mean that this expert knowledge is accurate.
By definition, tacit knowledge is knowledge that people carry in their minds and is, therefore, difficult to access; it is acquired by experience. ( )

If the subtitle of this book had been "when the many are smarter than the few", I would have found it a bit more, well, honest. It starts by showing some circumstances where aggregating the views of large groups can get results better than any of the individuals in the group. But there are more cases in the book where group ratings and decisions go wrong than where they go right. Surowiecki seems to imply that if we could just get the right process for aggregating different views, we could overcome these difficulties. Real life rarely allows that. ( )

The Yang to the Yin of 'The Cult of the Amateur'.

This book started off great. But eventually, his examples got too random. On the plus side, this book does an excellent job of explaining when groupthink is a good thing, rather than just painting everything with a broad brush. ( )

Fascinating book full of arcane studies which support the author's contention that under specific conditions, crowds can be extraordinarily intelligent in their choices and can be relied upon to best the experts. ( )

I recommend this book highly! Jim Surowiecki has created a highly readable book that puts much of the decision process of groups into clear and lucid terms. Jim addresses the three types of wisdom in "crowds" or groups. These are cognitive problems, coordination and cooperation.
Cognitive problems are one that have or will have a definite answer. Coordination problems require members to figure out how to coordinate their behavior with each other.
The last type is cooperation where self-interested, distrustful members need to work together.
For each of these types, Surowiecki provides clear examples of group operation and what are the key characteristics necessary for success.
While Surowiecki is a proponent of the value and wisdom of collective decision, he also recognizes cases when the collective decision process can go awry (for example, stock market bubbles) and discusses the root causes. ( )

Interesting book. Finally read it in 2007 even though the ideas in the book have had a significant impact on the strategy for the foresight team at Arup.
I liked the examples and found myself agreeing with the statements being made. HOWEVER i was looking forward to some kind of conclusions that might draw together the observations - but the book (or is it a series of column articles?) just ended. ( )

influential in developing thought. tidbits from many of my books on networks, free agent capitalism, statistics, math. this is a favorite among many well read that i know. ( )

terrific ( )

What a curious phrase is “wisdom of crowds.” Like you, I had heard of the “madness of crowds” and “unruly mobs” … but wisdom? The concept is the subject of the book of the same name by James Surowiecki.

Surowiecki’s premise in The Wisdom of Crowds is that the Many are usually smarter than the Few. Ask a crowd to guess the number of jellybeans in a jar and their average will probably be closer to truth than most — if not all — the individuals involved.

Poll the studio audience of the “Who Wants to Be a Millionaire” game show and they have the right answer more than 90% of the time — a far better average than the individual “expert” that the game’s player typically relies upon more.

Using example after example, Surowiecki builds up a compelling case that almost any problem, whether simple or complex, should be posed to a large group of people whose members are left to think as individuals (no persuading debates, endorsements, peer pressures, factions, etc.). That group’s aggregated opinions will almost always find a better solution than even the smartest individual. The most amazing case he presented involved a submarine missing in the Atlantic. A group of naval specialists — each expert in something different (ocean current, hydrodynamics, submarine engines, etc.) — predicted widely different locations for the vessel. All were wrong. But when the investigation leader combined their separate predictions, he found the sub on the ocean floor only about 200 yards off target.

Every person has one puzzle piece — a unique perspective on a problem, a different bit of information. Combine the pieces and the group solves the whole puzzle. In Surowiecki’s words, “the crowd is holding a nearly complete picture of the world in its collective brain.” One person’s bias, error, or underestimation is canceled by someone else’s bias, error, or overestimation. Under the right circumstances, the Crowd gets it right more often than the experts.

I disagreed with some of the book’s specifics, but found it hard to discount Surowiecki’s basic premise as he applied it to problem-solving, investigations, the Internet, science, corporations, capitalism, and democracy. The social networking revolution on the Internet right now (with personal websites, blogs, wikis, and tagging) is a perfect example of the Wisdom of Crowds. There’s no formal structure; no central committee calling the shots. And yet, as a crowd, the Social Web is assembling, interacting, and meeting needs in ways no one could have conjured or designed by himself.

[More of my book reviews are available at http://mostlynf.wordpress.com]

http://malaysianatheist.blogspot.com ( )

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An excellent book putting forward a great idea. In some ways counterintuitive, but there are compelling arguments in this book and I quickly found myself pretty much in full agreement. ( )