By Jesse Ocean  |   10th October 22

wise crowd

The 4 Aspects Of Forming A Wise Crowd

The book “The Wisdom of Crowds” by The New Yorker business columnist James Surowiecki presents the notion that a crowd can best take in the information given to them. So a collective choice will be infinitely more accurate than that of the smartest individuals in the group.

That being said, four different elements have to be factored in for the crowd to make collective decisions that are wise and useful. If the decisions they make lack any of these four particular areas, the results are less than satisfactory.

These four areas are:

1. Diversity of opinion

You know that saying, ”birds of a feather flock together”? Unfortunately, if you were to apply that concept to the idea of crowd wisdom, you would fail spectacularly. The reason is that homogenous groups tend to have relatively similar cultures and upbringings, resulting in a narrowness of thought.

Whereas a diversity of opinion – having private information even if it’s an eccentric interpretation of known facts – results in groups making better judgements by virtue of averaging all those judgements. Sure, there may be outliers that can provide better individual results, but they do not necessarily come close to that of the group’s collective knowledge.

Surowiecki also proposes that we should stop “chasing the expert.” The one smart person in the room does not necessarily equate to an answer that will bring in results.

Instead, it is the diversity of opinion; the combined information known to both the smart and the not-so that makes for a balanced solution. This is because thoughts or opinions contain both info and error. If you combine enough of them, you will mostly get the correct information with many significant mistakes cancelled out.

2. Independence of thought

Surowiecki proposes the notion that most people are generally overconfident. You probably don’t need a rocket scientist to tell you that, but most people will (obviously) deny that fact. It is this independence of thought that helps bring out the best in crowd decisions. When the opinions of those around them do not determine people’s views, you get different ideas on the table. When that is mixed with other non-conforming ideas, well, the results are undeniable.

Surowiecki also proposes that information cascades when passed from person to person, and passes beyond the moment the information is a workable solution to the current problem.

David Easley, a Cornell University professor mentioned by Surowiecki, postulates that an information cascade occurs when people “abandon their information in favour of inferences based on earlier people’s actions”. It’s a lot like monkey see, monkey do. These information cascades can be good or bad, depending on what is passed on. He notes the plank roads as a bad example and the development of the standardised screw as a good one.

3. Decentralisation

The concept of decentralisation is one that already exists in economic theories. Here, Surowiecki adds to that with the notion that decentralisation offers a solution.

Take, for example, Linux. Linux is an open source Unix based code developed by Finnish hacker Linus Torvalds, and one of the contenders of Microsoft.

Surowiecki makes a point for Linux in that its operation is decentralisation in action. Being an open source software means many persons can work simultaneously on the code to improve it without receiving orders from top management.

Another great example is Firefox, which is also an open source software. Firefox is one of the best browsers to date, mainly because its fixes come from users who are genuinely vested in the browser’s success.

Friedrich Hayek, an economist also mentioned by Surowiecki, postulates that decentralisation is critical to what he proposes as tacit knowledge – knowledge that is difficult to write or verbalise but is nonetheless extremely useful. Tacit knowledge is different from explicit knowledge, which is knowledge that can be written down or verbalised. Though tacit knowledge is specialist knowledge, usually gained from experience from a job or vocation, it is helpful in enabling people to propose a better solution.

4. Aggregation

Now, we arrive at the final piece of the puzzle – aggregation.

Lyon and Pacuit define aggregation as “to convert the contributions of your crowd into your desired output.”

In Surowiecki’s book, aggregation is the various methods of turning a clump of private judgements held by several individuals into a collective judgement.

By using various private judgements to get an answer, it will collectively make for a more robust answer. This is because the knowledge that may not be useful for one group or individual, when pooled together, may be helpful for another when solving the overarching problem. Aggregation, not centralisation, is the way forward Surowiecki says.


These four proposed aspects will help the crowd form a better, more informed decision that is accurate and all-encompassing.

Though there are flaws in these aspects, if used correctly, they will yield the results you want. Not to forget that it is in the crowds where the wisdom lies. And although certain individuals will outperform the crowd’s collective decision, they are probably better off combining their expertise with the crowd to come up with an even better answer.

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