The Wisdom of Crowds (James Surowiecki)

The author maintains the stance that the wisdom of the collective is better than the wisdom of the individual, and gives a number of social and psychological experiments to demonstrate this. He identifies three keys that lead to improving wisdom, or at least better decisions - diversity, independence and decentralisation, and again gives plenty of examples. But he then destroys his argument with numerous examples of the ignorance of the collective – from stock market bubbles to science and business. Whenever information is shared and herd instinct takes over, it seems that the crowd loses wisdom (for more of this see Extraordinary Popular Delusions and the Madness of Crowds).

So the book raises some interesting ideas, but stutters to an unsatisfactory close, providing a whole set of conflicting information. Good in parts, but a stronger conclusion would have helped. Some of the most interesting ideas seek to capture the wisdom of the collective in a way that helps with decision-making, but doesn't actually make the decision. In organisations, using internal markets or bets on new products seems to generate better feedback rather than just asking people - removing the fear of telling the boss bad news. Seeking diversity, and using information differently to the herd, improves the value of information in decision-making compared to copying everyone else.