The one-sentence summary
Forget individual choice – people just copy each other, but crowds usually get it right.
- The book is subtitled Why the many are smarter than the few and was first aired by the author as a column in The New Yorker magazine
- History tells us that when you want something done you turn to a leader: right? Wrong. If you want to make a correct decision or solve a problem, large groups of people are smarter than a few experts.
- The theory of the wisdom of crowds has huge implications for the way we run our businesses, structure our political systems, and organise our society.
- When Charles Mackay wrote in 1841 about Extraordinary Popular Decisions and the Madness of Crowds, he presented an endlessly entertaining chronicle of mass manias and collective follies. This book proposes the opposite.
WHAT’S GOOD ABOUT IT
The book could change the way you think about human behaviour. His points include:
~ In 1906 800 people guessed the weight of an ox. Their average was exactly right.
~ In 1968 a submarine was lost, and was only found when a range of scenarios were pieced together did they find it.
~ On Who wants to be a millionaire? the experts (phone a friend) are right 61% of the time, and the crowd 91%
- The difference difference makes: tiny changes can make for mass acceptance
- Monkey see, monkey do: independence is important to intelligent decision making
- Putting the pieces together: decentralisation (letting go) makes for better collective decisions
- Shall we dance? Coordination is possible in a complex world, as evidenced by how huge numbers of people successfully navigate their way round busy city streets
- Committees, juries and teams: these do not make good decisions if they are led in a certain direction by the chairperson
- The company: meet the new boss, same as the old boss? Companies that coordinate their behaviour with that of their customers do better, such as Zara delivering new lines twice a week instead of once a fashion season.
WHAT YOU HAVE TO WATCH
- There are no clear sections so you have to burrow deep for these nuggets.