The Wisdom of Crowds


“Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.”


The book explores the idea of large groups of people being smarter than an elite few at solving problems, fostering innovation, and coming to good decisions.


KEY TAKEAWAYS:

1. Crowds tend to make better decisions than smart individuals. The problem is that intelligent or knowledgeable people tend to resemble each other and the difference in perspectives decreases.

2. You need 5 elements for a wise crowd: diversity of opinion, independence, decentralization, aggregation, trust.

3. The limitation of any crowd is the herd mentality, when influenced by a few people only.


READ IF: You are interested in understanding group dynamics in decision-making.