Wisdom of Crowds (Vox Populi)– Basic Hypothesis Social Media: Collectively a Crowd is Wiser that Its Individuals…

Wisdom of Crowds is the notion that the collective opinion of a group of individuals make wiser decisions than those of a single knowledge person, or even an expert…

In the book ‘The Wisdom of Crowds’ by James Surowiecki argues; that under the right circumstances, groups are remarkably intelligent and are often smarter than the smartest person in the group… He points out that crowds often outperform experts when 4-conditions are met: 1) diversity of opinion. 2) independent thinking. 3) local knowledge. 4) aggregation mechanism. And without all four of these conditions, the crowd can easily descend into the conventional wisdom of an unintelligent mob, or myopic group-think…

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Underlying Surowiecki’s hypothesis is that in order for a group of people collectively to make good decision, the group must: Be diverse: wide range of backgrounds, i.e.; experts, non-experts… Have basic grasp of the issues: knowledgeable about– facts, process, consequences, outcomes…

Act independently: individuals must be allowed to use their own internal judgement systems to come to a personal decision, without influence from each other or outside…

Aggregate-able: there must be some way of crystallizing the group’s collective ‘decision’… The ‘wisdom of crowds’ is one of those perfect ‘of-the-moment ideas’, and the phrase is often interpreted, such as; as individuals they may be ignorant and short-sighted, but together they become ‘wise’…

According to Drake Bennett; the implication is that the bigger the crowd, the greater the accuracy… it’s like running an experiment; all else being equal, the larger the sample size, the more trustworthy the result. The idea has a particular resonance at a time when ‘online’ business rely on aggregated user ‘reviews’, ‘ratings’… e.g.; social networks that  promote ‘things’ rely, in part, on how many people (i.e., the group) ‘likes’ it…

According to Sinan Aral; ‘online’ ratings are prone to a herding mentality; they are often disproportionately positive, because in many cases reviewers tend to pile on each other’s glowing rating, e.g.; distributions of product reviews on, e.g.;  Amazon.com include far more extreme positive (five-star) than negative (one-star or two-star) or generally positive (three-star or four-star) reviews… also more ‘positives’ are observed in reviews, ratings for, e.g.; books, restaurants, movies… where crowds don’t really provide an accurate assessment but are just going along with the trend– it only inflates the numbers…

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In the article Wisdom of Crowds (Vox Populi) by Derren Brown writes: Crowd behavior is often associated with irrationality, i.e.; crowds form– mobs, cults… crowds panic and form herd mentalities and are often wrong, easily swayed… at least it’s a common perception of crowds…

According to Francis Galton; not all crowd behavior is negative and if you ask enough people the same question, collectively, they often come-up with better answers than even the experts… It was in 1906 that Francis Galton made his discovery of what is known as the ‘wisdom of crowds’ (vox populi)… and in his research he recognized that to benefit from ‘wisdom of crowds’ there must be several conditions:

First, each individual member of the crowd must have their own independent source of information…

Second, they must make individual decisions and not be swayed by the decisions of those around them… Third, there must be a mechanism that can collate these diverse opinions…

The Internet is a good example of the wisdom of crowds in action; it’s the reason that certain pages you search come-up near the top of the search list… In general terms the more people who link to a page, the more popular it is, hence the higher it’s listed on the search page… Another highly visible example of crowd decision-making can be found in the television game show ‘Who Wants To Be A Millionaire’: When a player does not know which one of four answers is correct, they can ask the audience. Then each member of the audience makes a separate and individual vote for the answer they favor. These votes are then collected and results displayed. Often it’s obvious from the result which answer has found favor, and that answer is the one the player generally goes along with: In 95% of cases it’s correct…

In the article Challenging Wisdom of Crowds by Ilan Mochari writes: Often there’s a gap between an actual concept and what most people believe is the concept… It’s important to point out that the concept of crowd wisdom does not actually apply to the province of online ratings, or any group decision wherein the individuals would be influenced by what other individuals in the group are thinking… Most forms of ‘online’ review systems, e.g.; Amazon, Yelp, Facebook… typically are not completely independent assessments but are often influenced by other assessments…

Technically, every member is independent to give whatever rating they like, but according to Sinan Aral; there’s something about seeing a preponderance of positive reviews or ‘likes’ that robs most site visitors of true independence– sometimes the ‘herding effect’ takes over… It’s entirely different from casting a blind ballot, the way you might if you were guessing how many jellybeans were in a jar… According to Aral; the takeaways here for online rating: (1) Take ‘positive’ online ratings with grain of salt. (2) Take advantage of ‘herding effect’ when promoting an ‘item’— encourage consumers to review positive ‘early’ and that could influence future consumers to be more positive toward the ‘item’ they are rating…

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Some early studies in social psychology examined whether groups were fundamentally different from individuals… Research supports the old saying that– two heads are better than one… Also research has shown that– one head can be nearly as good as two… as long as people follows the principles of– relevant knowledge and diverse perspectives… The key insight is that people typically rely on only a sample of the evidence available to them at any given time…

Given that crowds are often wise, an important question for social psychology is whether people understand the value of combining knowledge across people… According to Jimmy Wales; the problem in the notion is the word ‘crowd’… a ‘crowd’ is amorphous and it has no individual perspective… There is value in large a group, but each individual in the group must have some level of knowledge…

According to Maria Konnikova; crowds are limiting– they can provide better estimates and more accurate answers for certain issues… but they cannot  improve diversity of opinion, or coordinate action, or facilitate societal functions… It’s a simple statistical observation– from diversity of estimates comes improved accuracy, but not so fast: What happens if this so-called wisdom, while theoretically true, is practically speaking, not so easy? A study suggests that all it takes is a whiff of social influence (i.e., knowledge of how others are acting) for the wisdom to evaporate– and for crowds to become even less wise than individual decision makers…

According to Philip Ball; in an age routinely denounced as selfishly individualistic, its curious that a great deal of faith still seems to lie with the judgment of the crowd, especially when it can apparently be far off the mark… Yet there is some truth underpinning the idea that ‘the masses’ (crowds) can make more accurate collective judgments than expert individuals. So why is a crowd sometimes right and sometimes disastrously wrong? The researchers found that, as the amount of information individuals in the crowd were given about each others guesses increased, the range of their guesses got narrower, and the center of this range could drift further from the true value…

In other words, groups tend towards a consensus to the detriment of accuracy… This finding challenges a common view in management and politics that it’s best to seek consensus in group decision-making… What you can end-up with instead is ‘herding’ towards a relatively arbitrary position… Just how arbitrary depends on what kind of pool of opinions you start off with… According to Frank Schweitzer; if the group generally has good initial judgment, social influence can refine rather than degrade their collective decision… Whereas, no one should need warning about the dangers of ‘herding’ among poorly informed decision-makers; copycat behavior has been widely regarded as one of the major contributing factors in the financial crisis… It has long been argued that the wisest crowds are the most diverse…

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According to Scott Page; a diverse group of problem-solvers generally make a better collective guess than that produced by the group of best-performing solvers… In other words, diverse minds do better when their decisions are averaged, than single expert minds… All of these findings suggest that knowing who is in the crowd and how diverse is vital before you attribute to them any real wisdom…

According to trottdave; if you are part of a crowd, generally, you do what the crowd does… usually people don’t think, the crowd does the thinking, which is normal human behavior… Most people just follow the crowd because it’s probably right– it’s a human instinct… But the  crowd is just many individual people and people can be wrong– just because there are many people doesn’t make them any less wrong.

Most people find it very difficult to think, act against the crowd… What if the crowd is wrong? What if you are right? What if the crowd is an ensemblage of independent thinkers that share– information, ideas, opinions…?