Book Review on “The Wisdom of Crowds” by James Surowiescki
The results of Google search, how many beans are there in a jar, betting on sporting events, or voting for a president… What all of this can have in common? All of these results are based on the idea of intelligence of the groups of people. According to the author of “The Wisdom of Crowds” James Surowiecki, the decisions or opinions of the masses of people are much more accurate than of any one expert. This book is about very interesting idea that under the right circumstances groups can be remarkably smart and almost always smarter than the smartest person in that group. The book presents a lot of case studies and anecdotes to illustrate author’s arguments.
The central idea why the groups are smarter relates to diverse collections of independently-deciding individuals, rather than crowd psychology as traditionally understood. However, not all groups are smart. According to the author, these important criteria separate smart groups from others: diversity of opinion (each person should have private information even if it’s just an unusual interpretation of the known facts), independence (people’s opinions aren’t determined by the opinions of those around them), decentralization (people are able to specialize and draw on local knowledge), and aggregation (some mechanism exists for turning private judgments into a collective decision). These characteristics are necessary in order for a group to be smart.
The author suggests by providing us with many real life examples that if we are trying to solve a complicated problem or we are trying to make a decision, the best thing we can do ( of course, if the conditions are met) is we can ask the group of people rather than find a single expert. The fundamental conditions mentioned above are diversity, independence and decentralization. These characteristics are guaranteed to make for good group decisions. The author is very persuasive by probing his idea into...
