Simon Barratt

The wisdom of crowds

Decision making

James Surowiecki - The Wisdom of crowds.

100 years ago, walking through a fair, guess the wait of a fat oxe.  crowd consisted of farmer and butchers (who were expert in this area), others were just less informed

Reviewed the results in various ways, then just took the average number.  he estimated that the 'dumb' people would skew the answer.  the average was 1190 lbs, the actual weight turned out to be 1180lbs


The take away, is that under the right circumstances groups can make excellend decisions

Google succeeded because it built a better mouse trap.  Page rank algorithim.

At the race track.  The odds on rates are almost perfect at predicting the result of the winning horse.

Internal markets - HP staff ran markets to estimate the sales of printers, turned out they were more accurate that their official forecasts! Seimens

Are crowds more intelligent that experts?  Hysterical mobs or self regulating, highly intelligent bodies?

need 3 things
1.        indepenedent people
2.        able to fraw from a diverse source of information
3.        able to aggregate the judgements

all smart group
not so smart group
random group

all smart did outperform the not so smart (but not by much), the random group consistentl outperformed the all smart group

the perils of collaboration
we learn from others, imitation is good way to learn.
3 guys on s atreet corner stating into the sky, will cause 30% of passers by to the same. 9 people staring at the sky, will cause about 85% to stop and look in the sky.

few people can take over a group, if you are not careful.

"The Tipping Point" - book

peer pressure can cause the wrong decision to be made.

need to avoid information cascade, and ensure that people are using there information, not relying on information taken from others.

need to exchange infromation without exchanging influence

looser ties
leaders need not to impose their will on the group
talkative people are not necessarily intelligent people

blogs tend to talk to the same group of people. people who are like them,  need to inject more variety to mix it up.