- Series: Random House Large Print
- Hardcover: 640 pages
- Publisher: Random House Large Print (May 25, 2004)
- Language: English
- ISBN-10: 0375433627
- ISBN-13: 978-0375433627
- Product Dimensions: 5.8 x 1.3 x 8.6 inches
- Shipping Weight: 1.6 pounds
- Average Customer Review: 299 customer reviews
- Amazon Best Sellers Rank: #8,064,833 in Books (See Top 100 in Books)
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The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Random House Large Print) Hardcover – Large Print, May 25, 2004
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"Maybe You Should Talk to Someone" by Lori Gottlieb
"This is a daring, delightful, and transformative book." ―Arianna Huffington, Founder, Huffington Post Pre-order today
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What the crowd is saying about The Wisdom of Crowds:
“The Wisdom of Crowds is dazzling. It is one of those books that will turn your world upside down. It’s an adventure story, a manifesto, and the most brilliant book on business, society, and everyday life that I’ve read in years.”
—Malcolm Gladwell, author of The Tipping Point
“This book should be in every thinking businessperson’s library. Without exception. At a time when corporate leaders have shown they’re not always deserving of our trust, James Surowiecki has brilliantly revealed that we can trust each other. That we count. That our collective effort is far more important than the lofty predictions of those CEO-kings we have worshipped for too long.”
—Po Bronson, author of What Should I Do With My Life?
“Jim Surowiecki has done the near impossible. He’s taken what in other hands would be a dense and difficult subject and given us a book that is engaging, surprising, and utterly persuasive. The Wisdom of Crowds will change the way you think about markets, economics, and a large swatch of everyday life.”
—Joe Nocera, editorial director of Fortune magazine and author of A Piece of the Action.
“It has become increasingly recognized that the average opinions of groups is frequently more accurate than most individuals in the group. As a special case, economists have spoken of the role of markets in assembling dispersed information. The author has written a most interesting survey of the many studies in this area and discussed the limits as well as the achievements of self-organization.”
—Kenneth Arrow, winner of the Nobel Prize in Economics and Professor of Economics (Emeritus), Stanford University
From the Inside Flap
?No one in this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people.? ?H. L. Mencken
H. L. Mencken was wrong.
In this endlessly fascinating book, New Yorker columnist James Surowiecki explores a deceptively simple idea that has profound implications: large groups of people are smarter than an elite few, no matter how brilliant?better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.
This seemingly counterintuitive notion has endless and major ramifications for how businesses operate, how knowledge is advanced, how economies are (or should be) organized and how we live our daily lives. With seemingly boundless erudition and in delightfully clear prose, Surowiecki ranges across fields as diverse as popular culture, psychology, ant biology, economic behaviorism, artificial intelligence, military history and political theory to show just how this principle operates in the real world.
Despite the sophistication of his arguments, Surowiecki presents them in a wonderfully entertaining manner. The examples he uses are all down-to-earth, surprising, and fun to ponder. Why is the line in which you?re standing always the longest? Why is it that you can buy a screw anywhere in the world and it will fit a bolt bought ten-thousand miles away? Why is network television so awful? If you had to meet someone in Paris on a specific day but had no way of contacting them, when and where would you meet? Why are there traffic jams? What?s the best way to win money on a game show? Why, when you walk into a convenience store at 2:00 A.M. to buy a quart of orange juice, is it there waiting for you? What do Hollywood mafia movies have to teach us about why corporations exist?
The Wisdom of Crowds is a brilliant but accessible biography of an idea, one with important lessons for how we live our lives, select our leaders, conduct our business, and think about our world.
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Surowiecki writes good thumbnails about interesting subjects like the discovery of the U.S. submarine Scorpion, bee dance, how radio was first financed, basic rules of starling flock formation and Newsfutures.com.
He also brings up an odd phenomenon: The averages of multiple guesses is usually better than the best individual guess. Because no explanation is offered, it retains the status of miracle throughout the book. In another context he offers an interesting speculation: teams of government and corporate experts are often afflicted with “groupthink”.
The rest of the book is about crowds. Two of his criteria that constitute a crowd are independence and diversity. That sounds more like a group of well-informed independent thinkers, not a crowd as we commonly understand it. THE WISDOM OF WELL-INFORMED INDEPENDENT THINKERS is probably a harder title to sell.
Surowiecki isn’t even a man of the people. Read page 233 for his endorsement of a paternalistic automatic retirement plan.
But none of this keeps Surowiecki from pushing the idea of crowd wisdom. It’s an uphill struggle because most of the examples he provides are expert-heavy and in the case of the stock market, it’s impossible to measure either independence or diversity.
Most of his examples involve numerical guesses. Crowd wisdom means that the crowd is a kind of social Ouija board. But what if you need, say, a mathematical formula? But even if you only need number-guessers, what good is a crowd? Businesses and government research get ahead by keeping secrets. How am I going to keep the guesses of 100,000 people secret?
Most of the second half is about business. Here are two things to know about that. The first is that no university economic experiment can measure anything worthwhile because millions of real dollars aren’t at risk. The second is that if Surowiecki’s syndicalist ideas worked better than capitalist ideas, they would have taken the world by storm in the 19th century when they were introduced.
And if business forecasting is a kind of wisdom, there’s an expert who always beats the crowd. His name is Warren Buffett.
If nothing else, The Wisdom of Crowds should entertain you. It may not do much more than this if you are already well read in economics, complexity theory, decision analysis, organizational theory, social psychology, prospect theory and other fields. Few readers will have delved into all the relevant areas to any great extent, so most can expect to learn something new, interesting, and quite possibly useful. Surowiecki's wide-ranging gathering of sources to support his argument is a virtue, yet it's also something of a problem. The difficulty of knowing much about all the areas on which he draws makes it easy for him to pick and choose studies and arguments selectively. While many of his points are well made, the way he supports his case sometimes seems one-sided.
In evaluating and supporting the idea of the wisdom of crowds, Surowiecki looks at how collective intelligence can be applied to three kinds of problems: Cognition problems (which have definitive solutions), coordination problems, and cooperation problems (which require self-interested agents to work together). The first half of the book sets out the theory, thoroughly and entertainingly illustrated by examples. These include the smarts of the audience on game shows, how to design an excellent search engine, why short selling is a good thing, and how a group finds a lost submarine. The second half of the book applies the ideas to show various ways in which people organize toward common goals in cases such as traffic, science, juries, committees, business organizations, markets, and democracies.
Among the main points that may be useful to executives, Surowiecki emphasizes that for the crowd to be wise, it must be characterized by diversity of opinion, independence of members from one another, and a specific kind of decentralization, and there needs to be a good method for aggregating opinions. He stresses that the best collective decisions result from disagreement and contest, not consensus or compromise.
While corporations often rely on experts, the book does well at challenging our confidence in expertise as compared to the average of the crowd. In the course of a discussion of the role of independence, we learn that to improve your organization's decision making you should ensure that decisions are made simultaneously rather than one after the other. Finally, I have to second Surowiecki's puzzlement at the apparent lack of interest by companies in using markets (such as decision markets) for corporate strategy and market research.
As a U.S. Army veteran, the author propelled me to thoughts on how the military could use its people's collective wisdom, something on which I have written extensively:Nine Weeks: a teacher's education in Army Basic Training
Among the most relevant claims from the book is this cogent bit of logic:
"To state the obvious, unless people know what the truth is, it's unlikely they'll make the right decisions. This means being honest about performance. It means being honest about what's not happening. It means being honest about expectations. Unfortunately, there's little evidence that this kind of sharing takes place....One of the things that gets in the way of the exchange of real information is the deep-rooted hostility on the part of bosses to opposition from subordinates. This is the real cost of a top-down approach to decision making: it confers the illusion of perfectability upon the decision makers and encourages everyone else simply to play along. What makes this especially damaging is that people in an organization already have a natural inclination to avoid conflict and potential trouble. It's remarkable, in fact, that in an autocratic organization good information ever surfaces.
It's a book that anyone who has been around people should read.