Large groups are more accurate that any expert
In 1906, English scientist Francis Galton visited a country livestock fair and stumbled upon an intriguing contest. An ox was about to be slaughtered, and the villagers in attendance were invited to guess the animal's weight after being slaughtered and dressed. Nearly 800 gave it a go, and not surprisingly, no one hit the exact mark: 1,198 pounds. Astonishingly, however, the average of those 800 guesses came close - very close indeed.
It was 1,197 pounds.
This anecdote captures the striking thesis of James Surowiecki's new book, "The Wisdom of Crowds: How the Many Are Smarter Than the Few." "Under the right circumstances," Surowiecki argues, "groups are remarkably intelligent, and are often smarter than the smartest people in them."
For evidence, he cites how groups have been used to find lost submarines, correct the spread on a sporting event, locate a Web page, even predict the president of the United States. So why aren't we using groups more?
Well, for one, crowds have a pretty bad rep. When evil or foolish influences rise to the fore, they ignite mob rule, lynching, financial panic, and styling trends like the mustache or jock-hawk.
Furthermore, as Surowiecki notes, corporate structure is enthralled with the idea of expertise. Strategy consultants demand hundreds of dollars an hour to tell companies what to do, while executives rake in 8-figure salaries to rescue sinking ships. To accept that the masses might know something valuable would mean radically altering how our country operates.
As counterintuitive as it sounds, however, the mathematics work so long as Surowiecki's three key criteria - independence, diversity, and decentralization - are satisfied. "If you ask a large enough group," he says, "to make a prediction or estimate a probability," the errors they make cancel each other out. "Subtract the error, and you're left with the information." In this fashion, the TV studio audience of "Who Wants to Be a Millionaire," guessed the right answer to questions 91 percent of the time, torching the "experts," who guessed the right answer only 65 percent of the time.