The Wisdom Of Crowd Analysis

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The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations is a book written by James Surowiecki that was first published in 2005. In it, Surowiecki argues that, thanks to the aggregation of information present in groups, the results of a group lead to better decisions than could have been made by any one of the group members, individually. Surowiecki uses multiple examples across many fields and domains to prove his theory. Ranging from psychology to economics, Surowiecki gives evidence to the highly functional aspect of groups and how, given the right combination of factors, a group will always be more successful in its results than individuals. To understand what it takes for a crowd to be wise, we must first understand what defines a crowd – Surowiecki says that a crowd is “really any group of people who can act collectively to make decisions and solve problems”. One of the very first anecdotes given in the book relates Francis Galton’s bewilderment at a crowd’s ability, once their scores were averaged, to more accurately guess the weight of a butchered ox than a common individual. This anecdote proves the thesis that “the idea of the wisdom of crowds is not that a group will always give you the right answer, but that it will consistently come up with a better answer than any individual can provide.”
Given this idea, Surowiecki argues that the bigger the crowd, the better, he also argues the importance of diversity because crowds can’t be wise if everyone picks the same answer, and, finally, that in order to optimize the wisdom of the crowd, four conditions need to be present in a healthy crowd for its results to be wiser than an individual’s. The ...

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...dual opinions of all the people in groups, but I will also be very wary of how easily crowds can turn on you. It is clear that crowds, when wise, are of crucial importance in any business dealings, but, should they be corrupted in any way, they can be extremely dangerous and even lead to the downfall of companies. I now have a clearer image of what it takes to have a successful crowd and what makes a crowd unwise. Surowiecki’s book The Wisdom of Crowds is a very intuitive look into crowds and groupthink. Through his identification of core problems that crowds face, and the four characteristics that it takes for a crowd to be wise, as well as the elements that lead to the corruption of crowds, he allows the reader to have a very in-depth knowledge into an area we’re all familiar with, as we’ve all been part of a group, and yet that we know surprisingly little about.

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