Hey! Randy

The Average Thoughts Averaged to Be Correct

Posted by heyrandy on June 7, 2008

The Wisdom of Crowds, James Surowiecke.  Doubleday, New York, 2004.  296pp., end notes, no index.

In contrast to what is thought to be the case, the collective intelligence of the group is lower than the sum of the members, Surowiecke argues that the group is actually smarter than the individual members.  He cites the group’s estimation of the dressed weight of a slaughtered ox in an experiment run by Francis Galton at a fair in England.  The group, largely non-expert average fair goers, gave an estimate that was off by one pound from the actual weight.  No one guess of the more than 800 estimates submitted was that close.  But when the guesses were averaged the result was amazingly accurate.

In more recent times the same type of experiment was conducted in a college class room using a jar of jelly beans.  Once again the average of the guesses was more accurate than any single guess.  Other examples, these from the real world, would be the stock market reaction to the space shuttle Challenger disaster and, oddly, the finding of the wreckage of the lost U.S. Navy submarine Scorpion in the Atlantic Ocean.

The way this works deal with group dynamics and the way individuals think.  To be effective, the individuals in the group must be independent of each other, a diverse lot, and each possess a different set of what Surowiecki calls, “private knowledge.”

The author survey the literature in the field of the social sciences to glean insights into the ways groups from committees to juries form opinions and conclusions.  It is when the principles are violated or are absent that the groups are subject to the herd mentality.  This, Surowiecki says, explains fads and bubbles.

In this age of the expert, yet the experts are usually wrong.  We tend to lean to their advice because of the technological nature of our modern lives.  But the experts never agree with each other; opinions are in perpetual conflict.  The distrust of experts in not new; Surowiecki cites Thomas Jefferson in preferring the opinion of a plowman to that of a professor on moral issues.

This is such to give us pause that the opinions of the elite in government and industry are not as brilliant as we are given to believe.  In fact, if we look at the evidence, when the elite get it right, it is often the case of pure luck.

A more realistic view of the professional managers would be to look to the space shuttle Columbia disaster.  Here the managers on the ground thought they had a problem with the heat shield on the shuttle when on take off the tiles were struck by a piece of foam that had fallen off the fuel tank.

In the meeting to discuss the problem, there was no dissent by any of the members of the committees.  This is largely due to the homogeneous nature of the members: they were all veteran NASA employees that came to the agency directly from college.  They were all working with the exact same information and with the same presuppositions.  The exchange of ideas was discouraged,  and the group leader expressed the idea that nothing could be done anyway.  No new information was sought.  It turns out that NASA did not even know the extent of the damage.  So nothing was done.

When done correctly, the average of the group can do very well, better than any expert.  When done the way it is usually done, the result is a burst bubble, or a destroyed shuttle and dead crew.

The book is worth the effort to read.  The writing is passable in the most part, a bit dry in others. The end notes an abomination.  First they are end notes.  But worse of all there is no note reference on the pages of the text.  One must get the idea that there is a note from the quotation marks.  I hope this was a decision by an expert.

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One Response to “The Average Thoughts Averaged to Be Correct”

  1. […] – bookmarked by 5 members originally found by skrisser on 2008-12-23 The Average Thoughts Averaged to Be Correct https://heyrandy.wordpress.com/2008/06/07/the-average-thoughts-averaged-to-be-correct/ – bookmarked […]

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