The Wisdom of Crowds Book Review
For our newest addition to our book review by Marketing Executive Dominic Moore; he takes a look into
“The Wisdom Of Crowds”
by James Surowiecki.
Not only did we review this book, but we took the time to take his theory and put it into practice at a recent exhibition
"Why the Many are Smarter than the Few"
James Surowiecki was born on April 30th 1967 and is an American Journalist. A frequent writer in a column called The Financial Page, and a staff writer in The New Yorker.
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:
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:
- 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
- Trust – Trusting that the group and situation they are in is a fair environment
“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 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.
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 point of view, to see how people reacted to such a simple task of guessing sweets. The results were staggering. The different perceptions to the amount show how no two people think alike, with some guessing as little as 250, and some roaring 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 a total of 192 away from the 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 it took just the 102 people who guessed the total at our event to be so close to the real answer as a whole, rather than 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 in terms of research too. If brands want to know opinions and thoughts on their products or services, that if you ask the right people, and the right circumstances, the results you will get are better than anyone staff member, and allow you to make decisions and changes with confidence; knowing the many feel this way, rather than the few.
How many Jelly Beans did you think there were are in the picture?