Product Details

• Amazon Sales Rank: #199275 in Books
• Published on: 2005-08-16
• Original language: English
• Number of items: 1
• Binding: Paperback
• 336 pages

From Amazon.co.uk
Smart people often believe that the opinion of the crowd is always inferior to the opinion of the individual specialist. Philosophical giants such as Nietzsche thought that "Madness is the exception in individuals but the rule in groups". Henry David Thoreau lamented: "The mass never comes up to the standard of its best member but on the contrary degrades itself to a level with the lowest member." The motto of the great and the ordinary seems to be: Bet on the expert because crowds are generally stupid and often dangerous. Business columnist James Surowiecki’s new book The Wisdom of Crowds explains exactly why the conventional wisdom is wrong. The fact is that, under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them. Groups don’t even need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision. Why? Because, as it turns out, if you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out. Not any old crowd will do of course. For the crowd to be wise it has to satisfy four specific conditions, but once those conditions are met, its judgment is likely to be accurate.

Surowieki concentrates on three kinds of problems. The first are cognition problems (problems that are likely to have definitive answers, such as: "How many books will Amazon sell this month?"). The second are problems of coordination (problems requiring members of a group to figure out how to coordinate their behaviour with one another) and the third are problems of cooperation (getting self-interested, distrustful people to work together-- despite their selfishness). The brilliant first half of the book illustrates this theory with practical examples. The second half of the book essentially consists of case studies with each chapter talking about the way collective intelligence either flourishes or flounders. Much of this part deals with business topics such as corporations, markets and the dynamics of a stock-market bubble.

Surowieki has an engaging, direct style defending his surprising central thesis in entertaining ways by, for example, talking about laying bets on football games and political elections; traffic jams; Google; the Challenger explosion and the search for a missing submarine. The Wisdom of Crowds is an entertaining book making a serious point and by the end of the superb first half the reader has been made to accept that, while with most things, the average is mediocrity, when it comes to decision-making the average results in excellence. --Larry Brown

Amazon.co.uk
Smart people often believe that the opinion of the crowd is always inferior to the opinion of the individual specialist. Philosophical giants such as Nietzsche thought that "Madness is the exception in individuals but the rule in groups". Henry David Thoreau lamented: "The mass never comes up to the standard of its best member but on the contrary degrades itself to a level with the lowest member." The motto of the great and the ordinary seems to be: Bet on the expert because crowds are generally stupid and often dangerous. Business columnist James Surowiecki’s new book The Wisdom of Crowds explains exactly why the conventional wisdom is wrong. The fact is that, under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them. Groups don’t even need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision. Why? Because, as it turns out, if you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out. Not any old crowd will do of course. For the crowd to be wise it has to satisfy four specific conditions, but once those conditions are met, its judgment is likely to be accurate.

Surowieki concentrates on three kinds of problems. The first are cognition problems (problems that are likely to have definitive answers, such as: "How many books will Amazon sell this month?"). The second are problems of coordination (problems requiring members of a group to figure out how to coordinate their behaviour with one another) and the third are problems of cooperation (getting self-interested, distrustful people to work together-- despite their selfishness). The brilliant first half of the book illustrates this theory with practical examples. The second half of the book essentially consists of case studies with each chapter talking about the way collective intelligence either flourishes or flounders. Much of this part deals with business topics such as corporations, markets and the dynamics of a stock-market bubble.

Surowieki has an engaging, direct style defending his surprising central thesis in entertaining ways by, for example, talking about laying bets on football games and political elections; traffic jams; Google; the Challenger explosion and the search for a missing submarine. The Wisdom of Crowds is an entertaining book making a serious point and by the end of the superb first half the reader has been made to accept that, while with most things, the average is mediocrity, when it comes to decision-making the average results in excellence. --Larry Brown

Herald
'Lightly written, well-argued and deftly assembled . . . intelligent, engaging and provocative'

Customer Reviews

Interesting & stimulating
This book confounded my expectations. I generally dislike books like this but this one is interesting, provocative and stimulating. I do not wholly agree with the central thesis but even in the sections that I disagreed with there was enough interesting material to hold my attention, it was refreshing to need to question one's assumptions and to think about the points being made.

What is the Wisdom of Crowds?

The book defines it rather loosely suggesting that groups make better decisions if certain conditions are met. The conditions are: diversity (to ensure that different information is used to make the decision), independence and (a certain type of) decentralisation (to ensure that no one person is dictating the decision and that people are using their own private information) together with a way of summarising the different opinions into a collective view.

This loose definition allows the book to address a huge range of topics. It does not build a coherent case attempting to support and justify the central thesis. Instead it relies on a more anecdotal approach - examining situations where crowds can be wiser and situations where they fail to be wise - it is a biography of an idea rather than a manifesto.

To provide some structure three different types of problem are identified: cognition problems, co-ordination problems and co-operation problems. However, even within these broad areas large and rather diverse sets of problems are examined. To assist in the analysis a wide range to techniques are utilised including psychology, statistics and game theory.

The book makes great play of the ideas being counterintuitive and surprising; in some of the examples this is true, in others it seems to be seriously stretching the point. For example, the story about finding the lost submarine is interesting and surprising, as is the speed with which the market identified the company at fault for the Space Shuttle disaster. Less surprising are the examples which boil down to applied game theory, statistics or the fundamental nature of markets.

The most important (practical) problem with the thesis is that the conditions required for the wisdom of crowds to apply are very difficult to meet. The book recognises this and devotes considerable space to situations where crowds fail to be wise because of this. For me, these are probably the best sections of the book. It is very clear that the wisdom of crowds does not mean management by committee (as committees almost always fail to meet the necessary conditions). It is also very sharp on the culture of the 'expert' and is very clear about the need for dissent and the importance of (intellectual) diversity. The section on NASA is chilling and excellent.

In spite of the issues this is still a fascinating book. There is a huge range of stories and examples about how the wisdom of crowds can work and how it can fail spectacularly. I found it a thoroughly engaging and interesting book.

Never quite enough detail
The central premise of the book is an interesting one - that taking the average of a large number of individual viewpoints is likely to give a better result than taking the view of a single (or small number) of experts.

The paragraph above is, of course, an oversimplification. The book does go into rather more detail about when this works, and when it doesn't.

The approach in the first half of the book overall seemed OK - there were points in the first chapter where I thought that the author had fallen into some basic errors, but reading on made me realise that, no, he had considered them and had responses to the questions that I thought needed answering.

However, there are, to me, two flaws in the book.

Firstly, the second half of the book is too lightweight. He applies his theory to a whole bunch of situations (shorting of stocks, elections and so on), but doesn't present any proof of his ideas. He seems to assume that we're all so convinced in the first half that he can spend the second half saying "now we know this is true, this is what it means."

... which takes me to the second flaw.

Someone rather more intelligent than I - from memory Richard Feynman - wrote a long and interesting article about scientific rigour, and how when you do one expirement that appears to suggest a theory, you don't assume the theory is right because it fitted that one set of data. Instead, you specifically design other experiments that TEST the theory.

The problem with this book is that there appears to have been a single "real world example" which suggested the theory, but that every other example is a "class room experiment by Professor X in which a series of students did Y..."

Sadly, in a book that purports to relate to research going back 50 years, it is hard to believe that there are so few examples of the principle that can be brought to bear.


In having said all that, I have a nagging feeling that the theory is right, and that the evidence is there, but that the book was over-pruned to get down to a certain size. If this is correct, I wish he'd given more material showing why he was right, and less speculation about what would happen if he were.

Well-written explanation of why crowds are smart
This well-written bestseller explores the apparent anomaly that crowds of nonexperts seem to be collectively smarter than individual experts or even small groups of experts. This basic insight is at the heart of contemporary financial investment theory, with its emphasis on the difficulty of outguessing the market. Beginning with British scientist Francis Galton's remarkable discovery in 1906 that a crowd of nonexperts proved surprisingly competent at guessing the weight of an ox, financial columnist and author James Surowiecki skillfully recounts experiments, discoveries and anecdotes that demonstrate productive group thinking. The concept does not come as news to anyone reasonably well read in modern financial literature, but we recommend this comprehensive, fresh presentation.