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

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1. clairityDec 2022
   that's true for any sociopolitical system, and the reason why i push back on dichotomous thinking, especially "left-right" or "democrat-republican" in political discussions. this is the central exploration of Wisdom of Crowds, which i recommend to everyone even though it's considered 'old' now.
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2. yborisJan 2022
   A nice book I liked is "The Wisdom of Crowds" by James Surowiecki.

   From what I remember, the gist is you want people to be coming up with solutions to a problem independently, and then you want them to voice their proposals independently (so as not to be stymied by others' ideas). And then you want to aggregate these solutions/proposals. The beneficial dynamic breaks down if people around the table share their ideas in order one after another.

   https://www.amazon.com/Wisdom-Crowds-James-Surowiecki/dp/038...

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3. yborisJan 2022
   Have you read "The Wisdom of Crowds" by James Surowiecki? The book is focused on just the question of what conditions seem to be beneficial/detrimental to sourcing the "wisdom" from crowds.
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4. yborisJul 2020
   Reminds me of the wonderful book "The Wisdom of Crowds". The author points out under what conditions 'crowds' (or a group of people) can come together with a better answer than any individual.

   Primary take-away relevant to this situation is to have independent thought, and to have independent voicing/collecting of ideas.

   It's rather dangerous for a 'leader' of the group to express an opinion, only to have everyone confirm so as to score points.

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5. rsyncDec 2017
   "Theoretically, is not another growing peril of indexing that it removes incentives for companies to behave well or outperform, since if they're part of an index their shares will be bought automatically by retirement plans and investors anyway, irregardless of performance or competency?"

   You don't have to look far to find this ... a great example is Restoration Hardware, which very recently borrowed money to buy back roughly half of the outstanding shares:

   "The move has caused the company to consume basically all of its available cash balances and debt to increase by $500 million. In consequence, stockholder's equity has swung from $920 million at the end of the company's last fiscal year into slightly negative territory."[1]

   This squeezed the shorts as well as (to the uninformed) bolstered their EPS dramatically as there are half as many shares now outstanding.

   Nobody but an industry insider or other market-specific trading desk would have any interest in a disaster of a stock like this, and yet RH is in the Russell 3000 and is therefore auto-purchased by savers and retirees everywhere.

   "if everyone is indexing, it surely must lose it's efficacy because it is no longer efficient, will indexing then not underperform?"

   This was explained, I think, very succinctly in the Dave Collum "year in review"[2] wherein he explains:

   "In his must-read book The Wisdom of Crowds, James Surowiecki posits that a large sample size of non-experts, when asked to wager a guess about something—the number of jelly beans in a jar, for example—will generate a distribution centered on the correct answer. Compared with experts, a crowd of clueless people offers more wisdom. I submit that this collective wisdom extends to democracies and markets alike. A critical requirement, however, is that the voting must be uncorrelated. Each player must vote or guess independently."

   And that is precisely the issue we are worried about facing with index funds - we are buying indexes so as to access the (real, efficacious) wisdom of the crowd. However, if nobody actually makes a best guess - if there are no participants in the "guess voting" the wisdom of the crowd is lost.

   [1] https://seekingalpha.com/article/4104757-shorts-restoration-...

   [2] http://www.zerohedge.com/news/2017-12-23/dave-collums-2017-y...

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6. dbenhurOct 2014
   If you think you're going to harvest the "Wisdom of the Crowds", please go read James Surowiecki's book of the same name. http://www.amazon.com/The-Wisdom-Crowds-James-Surowiecki/dp/...

   If that's too hard, at least understand the summary on Wikipedia: http://en.wikipedia.org/wiki/The_Wisdom_of_Crowds#Four_eleme...

   A quick look at your site and it's clear you don't get point #2 Independence as you're showing people the prior avg before they submit their answer. I'll bet your site will suffer from a lack of #1 Diversity of opinion as well, as most websites tend to gather abnormally high concentrations of like minded people just through the natural ways they acquire and accrete audience.

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