Book Review: The Wisdom of Crowds
“The Wisdom of Crowds is a great read for marketers and social scientists”
About The Authors – James Surowiecki
James Surowiecki was born on April 30th 1967, and is a respected journalist and former business columnist for The New Yorker, known for explaining complex economic and behavioural ideas in accessible ways. His deep interest in markets, decision-making, and collective behaviour led him to write The Wisdom of Crowds, exploring how group intelligence often outperforms individual expertise.
The Wisdom of Crowds Book Review
The book explores the possibility that ‘the many’ are smarter than ‘the few’. He also applies this thinking into the world of business, economies and nations. Surowiecki argues that decisions that are made by an aggregation amongst groups, results in better decisions than any single member within the group. The book is presented primarily through the economical and psychological thinking that goes into the theory.
The central point is what we are interested in… The ability that a diverse collection of individuals are more likely to make types of decisions and predictions better than any individual or expert could. ‘Crowd Wisdom’ can be broken down into three main types, which are:
- Cognition – The thinking and processing of information, such as market judgement.
- Coordination – The ability to optimise naturally occurring incidents, such as pedestrians organising a busy path
- Cooperation – How groups of people form networks of trust without a central point controlling the behaviour
Now, thinking theoretically about a problem is one thing, but do you have data that can back it up? James uses multiple examples within the book of how this theory works, detailing concepts such as guessing the weight of a cow at a Farmers Fair.
Certain criteria is needed for the theory to work, allowing the crowd to be “wise”. These are:
- Trust – Trusting that the group and situation they are in is a fair environment
- Diversity Of Opinion – Each person receives private information
- Independence – People are not opinionated and driven by those around them
- Decentralisation – The ability to specialise in the local knowledge, such as what is ahead of them
The Wisdom of Crowds Theory
People have attempted to use this theory in real-life scenarios multiple times, one of which was Marcus Du Sautoy. Explaining this as “The Code” in a BBC documentary, playing on the ability for people to know more than one individual. The test subject, a jar of sweets. Asking people the simple question, how many jelly beans are there in a jar? In truth, what happens is you will receive wild expectations of too low or too high, rarely any guess even being completely close. But, if you add up all of the guesses, and take the average score, that guess will be closer than any one person’s total.
So, we decided as a research company, we should do a scenario test of the theory, and see if the insights are to be trusted.
“No decision-making system is going to guarantee corporate success. The strategic decisions that corporations have to make are of mind-numbing complexity. But we know that the more power you give a single individual in the face of complexity and uncertainty, the more likely it is that bad decisions will get made.”
The Application of the Theory
We attended the B2B Marketing Expo 2021 and decided that, at our stand, we should test the theory from a Market Research perspective to see how people reacted to the simple task of guessing sweets. The results were staggering. The different perceptions of the number show that no two people think alike, with some guessing as few as 250 and others guessing over 12,000 jelly beans. The result? Of course, it’s somewhere in the middle. Using the theory, the closest single guess we got was 192 away from the actual amount. Using the Wisdom Of The Crowd method, the combined guess of everyone who participated was closer than anyone person guess! It’s amazing to think that just the 102 people who guessed the total at our event were so close to the real answer as a whole, rather than to an individual.
Each person was asked to fill in a form for their guesses to obey the following rules. They could see the jar in front of them, understand what was inside and what they were being asked to do. They were told that the jar was completely full, not hollow in the middle and that it had been counted individually to get the total. Even when people were in groups, they were asked not to share what they thought to influence others.
In conclusion, when the environment is set up correctly for a scenario such as this, the Wisdom Of The Crowd works. We believe this based on research, too. If brands want to know opinions and thoughts on their products or services, then if you ask the right people, and under the right circumstances, the results you will get are better than those of any staff member, and allow you to make decisions and changes with confidence, knowing that many feel this way, rather than the few.
Overall thoughts
The Wisdom of Crowds by James Surowiecki argues that large, diverse groups often make better decisions than individuals, even experts. Drawing on psychology, economics, and real-world examples, it shows how collective intelligence works. It’s essential reading for leaders seeking smarter decisions, better forecasting, and stronger organisational thinking.
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