In the book “The wisdom of crowds” by James Surowiecki a very clear example is given which proofs the wisdom of a crowd. I want to share this example as it is very simple. A British scientist, named Francis Galton, had little faith in the intelligence of the average person. He wanted to prove that the average voter within a group was capable of very little.
“Galton was at an exhibition and came across a weight-judging competition. A fat ox had been selected and placed on display, and members of a gathering crowd were lining up to place wagers on the weight of the ox (after it had been “slaughtered and dressed”). People could buy a stamped and numbered ticket, where you filled in your name, your address, and your estimate. The best guesses would receive prizes. Eight hundred people tried their luck. They were a diverse lot. Many of them were butchers and farmers, who were presumably expert at judging the weight of livestock, but there were also quite a few people who had, as it were, no insider knowledge of cattle.
When the contest was over and the prizes had been awarded, Galton borrowed the tickets from the organizers and ran a series of statistical test on them. Among other things, he added all the contestants’ estimates, and calculated the mean of the group’s guesses. That number represented, you could say, the collective wisdom of the Plymouth crowd. If the crowd were a single person, that was how much it would have guessed the ox weighed.
Galton undoubtedly thought that the average guess of the group would be way off the mark. After all, mix a few very smart people with some mediocre people and a lot of dumb people, and it seems likely you’d end up with a dumb answer. But Galton was wrong. The crowd had guessed that the ox, after it had been slaughtered and dressed, would weigh 1.197 pounds (which converts to 543,0 kilos). After it had been slaughtered and dressed, the ox weighed 1.198 pounds (which converts to 543,4 kilos). In other words, the crowd’s judgment was essentially perfect.”
This example shows the simple, but powerful, fact that is at the heart of the book: under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them.
