SXSW - James Surowiecki

I am listening to James Surowiecki's talk on The Wisdom of Crowds.

Who Wants To Be A Millionaire?
Experts correct 66% of the time
Crowd correct 91% of the time.

Examples of tapping into collective intelligence:
Iowa Electronic Markets
Sports Trading.com - predicted all 50 state and 33 of 34 senate races
HP - sales forecast
E Lilly - drug trials
Siemens - predict software development cycles

Needs for collective intelligence to work:

• Method to Aggregate People's Judgement (all people equal, capture collective)
• Diversity - more diversity means smarter crowds (all people bring different perspectives)....investment clubs--male/female clubs did better single sex clubs...experts can't see their blind spots...exceptions bridge players and weatherman...
• Independence - you want to people to use their own knowledge and experience...when we work hard to reach consensus, you sacrifice the best decision...this is hard---humans by nature are imitators....reputation is important to all of us...if we do what others do, it is lower risk

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