THE WISDOM OF CROWDS: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations

Editorial Review - Kirkus - Jane Doe

Multitudes are generally smarter than their smartest members, declares New Yorker writer Surowiecki. With his theory of the inherent sagacity of large groups, Surowiecki seems to differ with Scottish journalist Charles Mackay's 1841 classic, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, which dealt with such stupidities as the South Sea Bubble, tulip-mania, odd styles of ... Read full review

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If you have been afraid to read this book for fear of running into ideas that fall prey to the sharpshooter heuristic, your fears are founded. However, despite some bad arguments, this book was far more balanced that I imagined it would be. In truth, it should be titled The Wisdom and Stupidity of Crowds: Parsing out What Makes Groupthink More or Less Effective." It had a lot of interesting little tidbits of knowledge that were new for me. Because of this, I would recommend this book to anyone who is capable of sifting out anecdotal stories and focusing on the parts that were far more informative and fact-based. 

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This is one of the three books everyone who is trying to understand Google should read.

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It was good.

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informative and well-written, this book examines the peculiar ability of a large group of people to arrive at answers as good as even better than the average and almost as good as the best among them. this characteristic is what makes markets work - when they do. surowiecki makes a stab at the essentials that govern what kind of problems a "crowd" as suited to solve, and the makeup of a "crowd" that seems to give the best results. three general classes of problems suited to crowds are identified: cognition, coordination and cooperation problems. the factors driving solution are identified as diversity, independence, decentralization and a means by which collective wisdom can be aggregated. surowiecki draws primarily from behavioural economics and psychology to support his claims.
the first half of the book keeps to the theory while the second half deals with an interesting range of applications: traffic, scientific research (issues with competition and collaboration), small group dynamics (committees, the phenomena of group think), the oddity of the company (ronald coase's transaction costs, organizational pathologies), financial markets (the phenomena of herd mentality) and democracy. the chapters on small groups, the company and markets were particularly insightful.

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Surowiecki is a talented writer and one, who along with "Blink" author Malcom Gladwell, utilizes a writing style that includes myriad interesting scientific studies and historical anecdotes. He starts off with a fascinating story about some fair, at which he witnesses hundreds of people guessing the weight of a cow. No one got the exact weight of the cow, but the average guesses from everyone in the crowd was right on the money. This may seem like a coincidence, but Suroweicki goes on to describe many cases where the many come to astonishing conclusions, that the few could rarely come to.
One of the most interesting aspects of the book is the description of open source- the future of software. He also describes economics games and real economics like stocks and how millions of traders can "know" something without knowing it and how it's nearly impossible to win when betting on the NFL. Also, he includes ways in which groups of people don't provide a better answer than the expert, and in fact, explains how, in some situations, the masquerade of diverse thinking coupled with the detrimental "group think" can lead to disastrous results (e.g. the 2003 shuttle tragedy).
It's not explicitly layed out to the reader, but Suroweicki's ideas show how a democratic government will always be more beneficial to its people than a centralized small group.
It's a very fascinating book, and I recommend it exuberantly.

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