The Wisdom of Crowds by James SurowieckiOverviewJames SurowieckiThe Wisdom of CrowdsWisdom of crowds in actionCrowds and groupsKinds of ProblemsCognition problemsCoordination problemsCooperation problemsConditions that characterize wise crowdsDiversitySlide 13IndependenceSlide 15Decentralization and aggregationCase studiesCommentsDiscussionThe Wisdom of Crowdsby James SurowieckiAngela KilleINF 385Q Knowledge Management SystemsSchool of Information | University of Texas at AustinNovember 17, 2005OverviewAuthorWisdom of crowdsKinds of problemsConditions that characterize wise crowdsCase studiesCommentsDiscussionJames SurowieckiStaff writer at The New Yorker where he writes a business columnAlso published in The New York Times, The Wall Street Journal, and other periodicalsThe Wisdom of Crowds“Under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them. Groups do not need to be dominated by exceptionally intelligent people in order to be smart. Even if most of the people within a group are not especially well-informed or rational, it can still reach a collectively wise decision.” (p.xiii)Wisdom of crowds in actionWho Wants to Be a Millionaire?Crowds and groupsDifferent typesAware of group identityNo formal organizationChanging collection of numbers/dollarsCommonality – ability to act collectively to make decisions or solve problemsKinds of Problems Cognition problemsCoordination problemsCooperation problemsCognition problemsProblems with definitive solutionsExamples:Who will win the World Series next year?What would be the best location for this new coffee shop?Coordination problemsRequire members of a group to figure out how to coordinate their behaviorExamples:How can I drive safely in congested traffic?How much should my factory produce?Cooperation problemsGetting people to work togetherExamples:Paying taxesAgreeing on salaryCurbing pollutionConditions that characterize wise crowdsDiversity of opinionIndependenceDecentralizationAggregationDiversityDiversity in a conceptual and cognitive sense Why do we need diversity?Expands set of possible solutions to problemsGroups can conceptualize problems in new waysNegativesWhat about experts?Diversity“Bringing new members into the organization, even if they’re less experienced and less capable, actually makes the group smarter simply because what little the new members do know is not redundant with what everyone else knows.” (p.31)IndependencePeople’s opinions are not determined by the opinions of those around themKeeps people’s mistakes from becoming correlatedMore likely to have new informationMake sure decisions are made simultaneouslyIndependence“The more influence a group’s members exert on each other, and the more personal contact they have with each other, the less likely it is that the group’s decisions will be wise ones.” (p.42)Decentralization and aggregationFosters, and is fed by, specializationCrucial to tacit knowledgeStrengths/weaknessesMust have aggregationMechanism for turning private judgments into a collective decisionCase studiesEach chapter focuses on different ways of organizing people toward a common goalTraffic flowScientific collaborationCommittees, juries, and teamsCorporationsMarketsDemocracyCommentsKM and The Wisdom of CrowdsImportance of each person’s private (tacit) knowledgeAggregation – KM systemStresses independence, what about group discussion?Redundant – so many examples…No indexDiscussion“The best collective decisions are the product of disagreement and contest, not consensus or compromise.” (p.xix)“The best way for a group to be smart is for each person in it to think and act as independently as possible.”
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