I am listening to James Surowiecki’s talk on The Wisdom of Crowds.
Who Wants To Be A Millionaire?
Experts correct 66% of the time
Crowd correct 91% of the time.
Examples of tapping into collective intelligence:
Iowa Electronic Markets
Sports Trading.com – predicted all 50 state and 33 of 34 senate races
HP – sales forecast
E Lilly – drug trials
Siemens – predict software development cycles
Needs for collective intelligence to work:
- Method to Aggregate People’s Judgement (all people equal, capture collective)
- Diversity – more diversity means smarter crowds (all people bring different perspectives)….investment clubs–male/female clubs did better single sex clubs…experts can’t see their blind spots…exceptions bridge players and weatherman…
- Independence – you want to people to use their own knowledge and experience…when we work hard to reach consensus, you sacrifice the best decision…this is hard—humans by nature are imitators….reputation is important to all of us…if we do what others do, it is lower risk
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