The Wisdom of Crowds

In the first stage of this process, the list of possible solutions is so long that the smart thing to do is to send out as many scout bees as possible. You can think of Ransom Olds and Henry Ford and the countless would-be automakers who tried and failed, then, as foragers. They discovered (in this case, by inventing) the sources of nectar—the gaso

For an answer, consider a hive of bees. Bees are remarkably efficient at finding food. According to Thomas Seeley, author of The Wisdom of the Hive, a typical bee colony can search six or more kilometers from the hive, and if there is a flower patch within two kilometers of the hive, the bees have a better-than-half chance of finding it. How do the

This seems like an eccentric conclusion, and it is. It just happens to be true. The legendary organizational theorist James G. March, in fact, put it like this: “The development of knowledge may depend on maintaining an influx of the naïve and the ignorant, and . . . competitive victory does not reliably go to the properly educated.” The reason, Ma

So who picks the sweetest-smelling one? Ideally, the crowd would. But here’s where striking a balance between the local and the global is essential: a decentralized system can only produce genuinely intelligent results if there’s a means of aggregating the information of everyone in the system. Without such a means, there’s no reason to think that

If a group of autonomous individuals tries to solve a problem without any means of putting their judgments together, then the best solution they can hope for is the solution that the smartest person in the group produces, and there’s no guarantee they’ll get that. If that same group, though, has a means of aggregating all those different opinions,

The fundamental problem with an information cascade is that after a certain point it becomes rational for people to stop paying attention to their own knowledge—their private information—and to start looking instead at the actions of others and imitate them. (If everyone has the same likelihood of making the right choice, and everyone before you ha

In other words, if most decisions to adopt new technologies or social norms are driven by cascades, there is no reason to think that the decisions we make are, on average, good ones. Collective decisions are most likely to be good ones when they’re made by people with diverse opinions reaching independent conclusions, relying primarily on their pri

Independence is important to intelligent decision making for two reasons. First, it keeps the mistakes that people make from becoming correlated. Errors in individual judgment won’t wreck the group’s collective judgment as long as those errors aren’t systematically pointing in the same direction. One of the quickest ways to make people’s judgments

The variety of possible funding sources encouraged a variety of technological approaches.

On teams or in organizations, by contrast, cognitive diversity needs to be actively selected, and it’s important to do so because in small groups it’s easy for a few biased individuals to exert undue influence and skew the group’s collective decision.