According to research done, a decision made through a collective seemingly outperforms individual decision-making. But how true is this theory? Is there really strength in numbers?
“Wisdom of the Crowds” argues that a group’s answer is more accurate than an individual answer. The concept was tested where individuals were asked to guess the weight of an ox. No one got it right, but their average was close to the correct answer.
History of the Concept
In 1907, an English explorer, anthropologist, and eugenicist, Sir Francis Galton, published his article upon observing the Wisdom of the Crowds theory. Galton attended an annual show of the West of England Fat Stock and Poultry Exhibition in Plymouth. He kept a parlor game wherein the goal was to estimate the weight of a fat ox after it was slaughtered and dressed.
Those who guessed the nearest weight were rewarded. Galton reports that there were 787 participants, primarily butchers and farmers, and there were experts in estimating cattle weight. Galton borrowed the tickets on which the estimates were written and began to table the data.
After gathering the data, Galton noted that the average of all 797 participants’ answers was at 1207 pounds, and the ox’s actual weight after it was butchered and slaughtered was 1198 pounds. The average result was far more accurate than any individual answer and was nearer to the correct answer than the winners of the game. (Source: Wisdom of Crowds)
The Concept of the Crowds
This concept, though already existing, was only made famous in 2004. An American journalist, James Surowiecki, published the book titled The Wisdom of the Crowds, in which he examines how large groups have made good decisions in different fields.
In his book, Surowiecki supports Galton’s claim, but for it to be effective, the crowd has to meet specific characteristics:
- The group should be able to have a diversity of opinions.
- One person’s opinion should remain independent of those around them and should not be influenced by anyone else
- Anyone taking part in the crowd should make their own opinion based on their personal knowledge.
- The crowd should be able to aggregate personal opinions into one collective decision.
The theory claims that a large and diverse crowd would get to a more collective guess or answer rather than a group of experts. Their various solutions are often better when averaged, as opposed to the expert answers.
However, it should be noted that this concept is not the same as the bandwagon effect. The bandwagon effect is simply how people do something primarily because other people are doing it. This is the tendency of individuals to align their beliefs and behaviors to the greater masses.
The bandwagon effect is also known as herd mentality. This effect usually plays on the logic that people like to be on the winning team.
The bandwagon effect usually targets an individual’s cognitive bias and yearning to be part of the majority. The feeling of being part of the majority usually assures most individuals that they are making the right decision, even if it is the opposite of their personal beliefs. (Source: Investopedia)