Wisdom of the Crowd, Do’s and Don’ts
In class, we discussed the differences between the ideas of information cascades and wisdom of the crowd. The general idea was that if every one in the crowd makes a guess, then the average of all the guesses tends to be more accurate than that of a singular expert’s. However, there are a few flaws to this broad statement, and this article points them out.
For example, as stated in class, the individual guesses from the crowd must be independent from each other, or else a situation similar to an information cascade will happen, where people will just follow each other’s judgements, even if their individual information says otherwise. One instance of this effect was in 2011 where a crowd was asked to guess the length of the Swiss-Italian border. As the guesses continued, and people learned what the others were guessing, the range of the guesses became more and more narrow, as the group was leaning towards a consensus, that may or may not even be near accurate. If the guesses weren’t shared with the crowd, then the guesses may have been more spread out and a possibly more accurate average guess would’ve occurred.
Additionally, the diversity of a crowd should also be taken into consideration. If everyone in the crowd came from similar walks of life, are the same race/gender identity etc., that can skew the crowd’s average guess a certain direction. A diverse crowds allows more voices to be heard, and will often lead to a larger range of guesses. The article uses the example of a study on a crowd guessing the winner of a football game. People that were avid football fans skewed the average guess towards allegedly favored teams to win, without seriously considering all the possibilities and odds. If the crowd consisted of a more diverse group of people that don’t watch sports, people that watch sports casually, and serious sports fans, then the guess probably would’ve been less biased.
Overall, the idea of the wisdom of the crowd is pretty accepted; there’s a reason why “majority rules” is such a common idea. However, there are certain precautions you take, as there are many ways to “skew” up, which you should be wary of.
Source: https://www.bbc.com/future/article/20140708-when-crowd-wisdom-goes-wrong