The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations (Hardcover)

~ (Author) "One day in the fall of 1906, the British scientist Francis Galton left his home in the town of Plymouth and headed for a country..." (more)
Key Phrases: bowling stocks, foam strike, marginal traders, United States, New York, Wall Street (more...)

Editorial Reviews

From Publishers Weekly

While our culture generally trusts experts and distrusts the wisdom of the masses, New Yorker business columnist Surowiecki argues that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." To support this almost counterintuitive proposition, Surowiecki explores problems involving cognition (we're all trying to identify a correct answer), coordination (we need to synchronize our individual activities with others) and cooperation (we have to act together despite our self-interest). His rubric, then, covers a range of problems, including driving in traffic, competing on TV game shows, maximizing stock market performance, voting for political candidates, navigating busy sidewalks, tracking SARS and designing Internet search engines like Google. If four basic conditions are met, a crowd's "collective intelligence" will produce better outcomes than a small group of experts, Surowiecki says, even if members of the crowd don't know all the facts or choose, individually, to act irrationally. "Wise crowds" need (1) diversity of opinion; (2) independence of members from one another; (3) decentralization; and (4) a good method for aggregating opinions. The diversity brings in different information; independence keeps people from being swayed by a single opinion leader; people's errors balance each other out; and including all opinions guarantees that the results are "smarter" than if a single expert had been in charge. Surowiecki's style is pleasantly informal, a tactical disguise for what might otherwise be rather dense material. He offers a great introduction to applied behavioral economics and game theory.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Bookmarks Magazine

Surowiecki first developed his ideas for Wisdom of Crowds in his “Financial Page” column of The New Yorker. Many critics found his premise to be an interesting twist on the long held notion that Americans generally question the masses and eschew groupthink. “A socialist might draw some optimistic conclusions from all of this,” wrote The New York Times. “But Surowiecki’s framework is decidedly capitalist.” Some reviewers felt that the academic language and business speak decreased the impact of the argument. Still, it’s a thought-provoking, timely book: the TV studio audience of Who Wants to Be a Millionaire guesses correctly 91 percent of the time, compared to “experts” who guess only 65 percent correctly. Keep up the good work, comrades.

Copyright © 2004 Phillips & Nelson Media, Inc.

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Product Details

• Hardcover: 320 pages
• Publisher: Doubleday (May 25, 2004)
• Language: English
• ISBN-10: 0385503865
• ISBN-13: 978-0385503860
• Product Dimensions: 8.2 x 5.7 x 1.2 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 3.9 out of 5 stars  See all reviews (180 customer reviews)
• Amazon.com Sales Rank: #102,882 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

340 of 366 people found the following review helpful:

3.0 out of 5 stars Accessible tome on behavioral economics and game theory., June 2, 2004

By	David J. Gannon (San Antonio, TX USA) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

The Wisdom of Crowds : Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business,Economies, Societies and Nations by James Surowiecki is, essentially, a thoroughly accessible and readable tome on applied behavioral economics and game theory.

I know that doesn't sound too exciting, but this actually is a fascinating book that is something of a page turner if you have even the most vestigial interest in the topic.

The premise isn't new-those who are denizens of Wall Street and know Robert Prechter's oft cited work with Elliott Wave Theory will know something of the underlying premises of the book. However, Surowiecki takes this notion and moves well beyond the confined world if inventing (though he covers that as well) to apply the principles he delineates to life in general-behavior in traffic, tracking and responding to disease, navigating the internet and so on.

The strength of the boom is Surowiecki's ability to render the underpinnings of his theoretical paradigm in easily understandable terms and examples. Additionally, the book features an excellent opening that provides a wonderful foundation as regards applied behavioral economics and game theory in general.

On the other hand, Surowiecki tends to play both sides of the street. He uses his "expert" position on the subject to configure his arguments and analysis to tilt the weight of evidence behind his theory in many cases. In other words, his familiarity with where he wants this to go influences his choices of examples. Moreover, he relies on too few examples in too many cases. For example, the world of wall Street should have provided a wealth of examples as to the validity-and the errors-inherent in his theory. His choices seem to be crafted to provide maximum support while eliminating any element of contraindication whatsoever.

So, in the end, despite the fact that Surowiecki has written a wonderfully readable book, and posited some fascinating theoretical axioms, the book feels a bit to tilted to be thoroughly honest with the subject matter in an applied arena. Surowiecki gives us much food for thought but also leaves us with reasons to doubt somewhat his objectivity and intellectual honesty. That fact detracts frm the value of the book, and that's a shame.

236 of 260 people found the following review helpful:

5.0 out of 5 stars A Counter-Intuitive Notion, June 14, 2004

By	Craig L. Howe "The Pointed Pundit" (Darien, CT United States) - See all my reviews (TOP 500 REVIEWER)    (REAL NAME)

In 1906, Francis Galton, known for his work on statistics and heredity, came across a weight-judging contest at the West of England Fat Stock and Poultry Exhibition. This encounter was to challenge the foundations of his life's study.

An ox was on display and for six-pence fair-goers could buy a stamped and numbered ticket, fill in their names and their guesses of the animal's weight after it had been slaughtered and dressed. The best guess received a prize.

Eight hundred people tried their luck. They were diverse. Many had no knowledge of livestock; others were butchers and farmers. In Galton's mind this was a perfect analogy for democracy. He wanted to prove the average voter was capable of very little. Yet to his surprise, when he averaged the guesses, the total came to 1197 pounds. After the ox had been slaughtered, it weighted 1198.

James Surowiecki takes Galton's counterintuitive notion and explores its ramification for business, government, science and the economy. It is a book about the world as it is. At the same time, it is a book about the world as it might be. Most of us believe that valuable nuggets of knowledge are concentrated in few minds. We believe the solution to our complex problems lies in finding the right person. When all we have to do, Surowiecki demonstrates over and over, is ask the gathered crowd.

The well-written book is divided into two parts. The first deals with theory; the second offers case studies. Believe it or not, I found it to be a page-turner. The author has that precious ability to render the complex in simple, understandable and interesting prose.

I have long been an admirer of H. L. Mencken who once wrote, "No one is this world, so far as I know, has ever lost money by underestimating the intelligence of the great masses of the plain people."

By the time I finished this book, I believed Mencken was wrong.

41 of 44 people found the following review helpful:

5.0 out of 5 stars Essential reading, June 28, 2004

By	"chrisbooth34" (Palo Alto, CA) - See all my reviews

This is one of the most entertaining and intellectually engaging books I've come across in a long while. Surowiecki has a gift for making complex ideas accessible, and he has a wonderful eye for the telling anecdote. His thesis about the intelligence of groups made up of diverse, independent decision-makers seems initially counterintuitive, but by the end of the book it seems almost obvious, because of all the evidence Surowiecki piles up on its behalf.

The book does cover a lot of ground in not very much space, and the pace of the argument is at times too fast. But the throughline of the argument is almost always clear, and the stories Surowiecki tells are often memorable. The chapter on NASA's mismanagement of the Columbia mission and the tale of how a man named John Craven relied on collective wisdom to find a lost submarine are especially striking.

This is one of those books that I expect people will still be talking about and referring to years or even decades from now. It's also a book that I hope will have a concrete impact on the way that people make decisions, since the implications of Surowiecki's argument are radical in the best way.