The Wisdom of Crowds: 8 key ideas
The core ideas of The Wisdom of Crowds, each in under a minute, written in our own words. Want the full depth? Get the book.
- IDEA 1 OF 8
Groups can be smarter than experts
Surowiecki argues that under the right conditions, the combined judgement of a large group is often more accurate than that of any single expert.
Individual errors tend to cancel out.
- IDEA 2 OF 8
A crowd guessed an ox's weight
Surowiecki describes how the scientist Francis Galton found that the average guess of a crowd at a fair came remarkably close to an ox's true weight.
No single guesser did better.
- IDEA 3 OF 8
Diversity improves judgement
Surowiecki argues that crowds are wise only when members bring different information and perspectives.
Too much similarity weakens the group. A group of people who all think alike will repeat the same mistakes together.
- IDEA 4 OF 8
People must think independently
Surowiecki argues that people should form their own opinions rather than copy others.
Independence prevents errors from spreading. When everyone follows the person before them, the group loses the separate views that make it wise.
- IDEA 5 OF 8
Decentralisation uses local knowledge
Surowiecki explains that decentralised systems let people use specialised local knowledge.
No central planner needs to know everything. People close to a problem often know details that distant managers cannot see from the top.
- IDEA 6 OF 8
Answers must be combined
Surowiecki stresses that a method of aggregation, such as averaging or markets, is needed to turn individual views into a group decision.
Without such a method, a crowd's many separate views stay scattered and cannot guide a decision.
- IDEA 7 OF 8
Crowds can go wrong
Surowiecki describes information cascades and groupthink, when people follow others instead of thinking independently.
Bubbles and panics result. In such cases the crowd becomes less wise, because each member copies the others rather than adding something new.
- IDEA 8 OF 8
Markets can predict
Surowiecki describes prediction markets, where people bet on future events.
Their prices often forecast outcomes well. Because people who risk something on an outcome think carefully, the combined prices can bring out knowledge that no single person has.
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