WISDOM OF THE CROWD

Wisdom, William James said, is knowing what to overlook. The wisdom of the crowd is generally not ignored, though we recognize its deceptive abilities. Francis Galton surmised more than a hundred years ago that the average estimate of a group can be more accurate than estimates of experts. Galton believed in the concept of ‘breeding’. He believed that only a few people have the characteristics necessary to keep societies healthy. While attending a livestock exhibition, he came across an animal weight judging competition. As usual, the best guesses (in this case the weight of a fat ox) would receive prizes. A diverse lot of eight hundred people (including both experts and non-experts) tried their luck. “The average competitor was probably as well fitted for making a just estimate of the dressed weight of the ox, as an average voter is of judging the merits of most political issues on which he votes,” Galton wrote. He thought that the average guess of the group could be way off the mark. After the contest, he statistically analyzed the guesses and found that the crowd’s judgment was essentially perfect. Galton wrote later, “The result seems more creditable to the trustworthiness of a democratic judgment than might have been expected.”

Social groups can deliver better judgment than the judgments of individuals. Some individuals apply this mechanism to improve their decisions. Social influence plays a role in individual decision-making. People have an inclination to adjust their opinions to those of others so that they gradually converge toward consensus. But consensus can go totally wrong. The number of downloads can be the indicator of a song’s perceived qualities, and thus its success. The ‘herding effects’ created in this way prevents an objective measurement of quality. Little social influence is required to produce herding behaviour. This effect is valuable for society but using it multiple times creates collective overconfidence, and it could lead to false beliefs. Herding is more pronounced for opinions or attitudes for which no predefined correct answers exist. Another observation of researchers is that the negative effects of social influence depend upon an individuals’ confidence. Sometimes, undue confidence becomes a psychological trap to lead individuals into the false belief of collective accuracy.