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The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations By James Surowiecki ( Doubleday )
Release Date: 2004-05-25
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Product Description
“No one in this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people.” —H. L. Mencken
H. L. Mencken was wrong.
In this endlessly fascinating book, New Yorker columnist James Surowiecki explores a deceptively simple idea that has profound implications: large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.
This seemingly counterintuitive notion has endless and major ramifications for how businesses operate, how knowledge is advanced, how economies are (or should be) organized and how we live our daily lives. With seemingly boundless erudition and in delightfully clear prose, Surowiecki ranges across fields as diverse as popular culture, psychology, ant biology, economic behaviorism, artificial intelligence, military history and political theory to show just how this principle operates in the real world.
Despite the sophistication of his arguments, Surowiecki presents them in a wonderfully entertaining manner. The examples he uses are all down-to-earth, surprising, and fun to ponder. Why is the line in which you’re standing always the longest? Why is it that you can buy a screw anywhere in the world and it will fit a bolt bought ten-thousand miles away? Why is network television so awful? If you had to meet someone in Paris on a specific day but had no way of contacting them, when and where would you meet? Why are there traffic jams? What’s the best way to win money on a game show? Why, when you walk into a convenience store at 2:00 A.M. to buy a quart of orange juice, is it there waiting for you? What do Hollywood mafia movies have to teach us about why corporations exist?
The Wisdom of Crowds is a brilliant but accessible biography of an idea, one with important lessons for how we live our lives, select our leaders, conduct our business, and think about our world.
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 Groups of People are Smart! ( winstonsmith6076 )
This author has done an outstanding job of proving his thesis that groups of people are smarter than the smartest person in the group. The book touches on markets, juries, and economics, and many more topics, furthering his main point. This book will persuade the reader that experts and loners do not make the best decisions, but groups of informed people do.
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The Wisdom of The Wisdom of Crowds ( jimmieb )
This fascinating book it based on a simple, but counterintuitive premise--that a crowd of diverse people will almost always be smarter than any single expert. That is, take a group of people, some who may be educated, some who may be experts, and some who may be completely misinformed, and let them each independently solve a problem. Then, if you can take the average solution, it will be close to correct. Moreover, it will be closer than almost everyone else in the group. It's basically a bell-curve of knowledge, in which the exact center point would be the best guess.
Surowieki gives numerous examples, from betting markets, stock markets, psychological experiments, game theory, nature, artificial intelligence, economics and business. Two of the cases that really stand out to me are the search for a missing submarine, the Scorpion, in 1968, and the stock market's reaction to the Challenger disaster in 1986. In the case of the Scorpion, an enterprising naval officer named John Craven assembled a diverse team of men with a wide range of knowledge and had each guess, without consulting with one another, where the sub was. He then averaged their guesses. The sub was found 220 feet from that location. Similarly, after the Challenger crash, the stocks of most companies involved in the space program predictably took a quick nosedive. Most also quickly recovered, with the exception of Thiokol, the company that produced the O-rings on the rocket boosters. The stock market seemed to say that Thiokol was responsible, though all news at that point was that the cause was unknown. It wasn't until six months later, when the Presidential Commission released a report that the stock market was proven correct. It had been the O-rings.
Surowieki discusses different types of group decisions and how the theory applies to each. He also covers the many dangers that often befall groups making decisions leading to things like groupthink and stock market bubbles.
The Wisdom of Crowds is a radical theory, one that runs counter to much of what we believe in a democratic society and an economy based on the hierarchical org chart--namely in the power of the individual, the knowledge of our experts, and the wisdom of our leaders. Its implications for the way we manage our companies and our government is enormous. But after reading this book, it's hard to doubt its wisdom.
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An Entry Level Review
Afterthoughts: The title could have been "The Wisdom of One Man" because author James Surowiecki impressively exemplifies his theory - that large groups of people are collectively smarter than the smartest individuals themselves - through countless examples from past and present world affairs. Diverse and thought-provoking, Surowiecki's selection takes us from ocean floor to outer space, from a New Mexico bar to a field goal post, Detroit's first car to Zara's latest shipment, gangster films, traffic jams - the list goes on and on. This actually creates a conflict - you're learning so much from each paragraph that it's hard to remember what you read on the page prior. The reading experience is best described as "fleeting factual fun."
Takeaway: The knowledge must sink into the subconscious somehow because it can be applied instantaneously. For instance, barely into chapter three, I found myself jogging around Washington DC. Normally, I cross streets wherever and whenever I want. Citing the pedestrian's right of way, I basically run amuck with everyone else. But I quickly noticed that on these streets, no one else's feet were as arrogant as mine. Everyone was standing at the crosswalks waiting for the little white man to light up for permission to go. Were they just an obedient bunch of tourists OR were police officers in DC more likely to ticket jaywalkers? I opted to wait and walk with the wisdom of this crowd. I'll never know what could have happened had I chose to walk my way but I definitely felt like I had championed my inner intellect in knowing why I acted like I did. At the very least, it balanced out the feeling of inadequacy that resulted when I tried to pronounce the author's last name...
Kristen Zatina
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 No charts, no data, small font ( mindin )
This book has no data and no charts. Maybe for a lot of folks that is fine. But those of you like me-- who would expect a book with a title that sounds like a mathematical theory to at least have some statistical references-- should at least take this into your decision about whether you really want this book.
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More Nuanced Than I Expected ( billswift3 )
From a lot of the hype and reviews, I expected more of a polemic; this was a readable and nuanced view of collective behavior. Both when they get things right and when they go wrong. Three types of problems were addressed - cognitive/informational judgements, coordination problems, and cooperation problems. He also covered the requirements for collective judgement to work, the most important of which are independence (lack of which promotes bubbles and mobs) and a means of aggregating the independent judgements (the market is one example). He also covered the problems with it and when it cannot work, such as bubbles and traffic jams. It's density of ideas makes it harder to read than it otherwise would be.
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