crowd wisdom

8/1/2019 Crowd Wisdom

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The Wisdom of Crowds


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A warm-up exercise

Everyone write down what they think my age

is individually.

Now get the average of the answers.

How close are you to correct?


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Traditional Problem Solving

Use our Instinct/Guess

Use our own ExperienceAsk an Expert

Research books by Experts

Ask a Friend/Colleague Follow the Leader

Follow the Trend


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Francis Galton

Francis Galton (16 February 1822 17

January 1911), cousin of Charles Darwin,was an English Victorian polymath,

anthropologist, eugenicist, tropical explorer,

geographer, inventor, meteorologist, proto-

geneticist, psychometrician, and statistician.


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Francis Galton

In 1906 Galton visited a livestock fair and

stumbled upon an contest.An ox was on display, and the villagers were

invited to guess the animal's weight after it

was slaughtered and dressed.


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Francis Galton

Galton disliked the idea of democracy and

wanted to use the competition to show theproblems of allowing large groups of people

to vote on a topic.


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Francis Galton

787 people guessed the weight of the ox,

some were experts, farmers and butchers,others knew little about livestock. Some

guessed very high, others very low, many

guessed fairly sensibly.

Galton collected the guesses after the

competition was over


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Francis Galton

The average guess was 1,197 pounds


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Francis Galton


The correct weight was 1,198 pounds


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Francis Galton


The correct weight was 1,198 pounds

AMAZING


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Wisdom of Crowds

What Dalton discovered was that in actuality

crowds of people can make surprisingly good

decisions IN THE AGGREATE, even if they

have imperfect information.


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Other examples


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Who wants to be a millionaire?


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Compare the lifelines;

Phone a friend

Ask the Audience


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The correct answer is given;

Phone a friend

Ask the Audience


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Phone a friend

Ask the Audience


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Phone a friend

Ask the Audience


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Other examples


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The Spaceshuttle Challenger

On January 28, 1986, when the Space

Shuttle Challenger broke apart 73 secondsinto its flight, leading to the deaths of its

seven crew members. The spacecraft

disintegrated over the Atlantic Ocean, off the

coast of central Florida


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The stock market did not pause to mourn. Within

minutes, investors started dumping the stocks of the

four major contractors who had participated in theChallenger launch: Rockwell International, which built the shuttle and its main

engines;

Lockheed, which managed ground support; Martin Marietta, which manufactured the ship's external fuel

tank; and

Morton Thiokol, which built the solid-fuel booster rocket.


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Twenty-one minutes after the explosion,

Lockheed's stock was down 5 percent, MartinMarietta's was down 3 percent, and Rockwell

was down 6 percent.


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Morton Thiokol's stock was hit hardest of all. As the

finance professors Michael T. Maloney and J. Harold

Mulherin report in their fascinating study of themarket's reaction to the Challengerdisaster, so many

investors were trying to sell Thiokol stock and so few

people were interested in buying it that a trading halt

was called almost immediately. When the stockstarted trading again, almost an hour after the

explosion, it was down 6 percent.


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By the end of the day, its decline had almost

doubled, so that at market close, Thiokol'sstock was down nearly 12 percent. By

contrast, the stocks of the three other firms

started to creep back up, and by the end of

the day their value had fallen only around 3percent.


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What this means is that the stock market

had, almost immediately, labelled MortonThiokol as the company that was responsible

for the Challengerdisaster.

Months later it was discovered that it was in

fact Morton Thiokol who caused the problemwith the production of faulty O-rings.


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How did the stock investors know ?


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How did the stock investors know ?

There is no satisfactory explanation, other

than the wisdom of crowds.


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Other examples


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Google PageRank Algorithm

How does Google work ?

How does it classify pages so that typically

the page you are looking for is the in first ten

links it returns?


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It uses the PageRank algorithm, the specifics

of which are a closely guarded secret, but the

main idea is easy to grasp: the more sites that link to a certain URL with a

certain phrase, the higher the rating.

This works because each link is vote for theconnection between the phrase and the site.


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It uses the PageRank algorithm, the specifics

of which are a closely guarded secret, but the

main idea is easy to grasp: the more sites that link to a certain URL with a

certain phrase, the higher the rating.

This works because each link is vote for theconnection between the phrase and the site.


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Exercise

A friend of yours said they will be in Dublin

on Saturday and want to meet you, but you

didnt hear where they said, if you had you

guess where would you go ?


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Exercise

A friend of yours said they will be in Dublin

on Saturday and want to meet you, but you

didnt hear where they said, if you had you

guess where would you go ?

Most people would tend to say the Spire orClearys clock.


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Exercise

You also missed the time at which you are

supposed to meet them at, if the meeting is

for a Saturday, what time will you head into

town for?


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Exercise

You also missed the time at which you are

supposed to meet them at, if the meeting is

for a Saturday, what time will you head into

town for?

Most people say Noon or 1 oclock.


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Exercise

Thus in general the majority of pairs of two

people who dont know when are meeting or

where they are meeting could hook up

without prearrangement.


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So what doesthis tell us?


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Wisdom of Crowds

It shows us that groups of people make

excellent decisions and can select the correct

alternative out of a number of options without

any specific expertise.

How could this be?


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It is importantto remember


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Experts are not know-it-alls

Individual experts really arent as smart as

we think.

Herbert Simon and W.G. Chase (1973)

explored the nature of expertise in the

domain of chess.


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They showed a chess-board in the middle of

a game to an expert chess player and an

amateur.

They asked both to recreate the locations of

all of the pieces on another boards,

consistency the experts were easily able toreproduce the boards, whereas the amateur

rarely could.


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So does this mean experts are smarter ???


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No, because when they put the pieces on the

board randomly, the expert and amateur both

did equally as well.

This shows the very, very limited scope of

expertise.


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We normally assume people who are

intelligent at one pursuit are good at all, but

in actuality this is not at all the case.

Chase said the intelligence and expertise is,

in fact, spectacularly narrow


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A key point is


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Diversity

Scott Page has shown that groups

who display a range of perspectivesoutperform groups of like-minded

experts.


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Diversity

Diversity yields superior outcomes, and Page

demonstrates this in a range of ways.

Page suggests that difference beats out

homogeneity, whether you're talking about

citizens in a democracy or scientists in the

laboratory.Diversity gives you a larger range of opinions

to select from.


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Diversity

If we dont have diversity in our

groups we end up withGROUPTHINK.


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GroupThink

Groupthink occurs when a group makes

faulty decisions because group pressures

lead to a deterioration of mental efficiency,

reality testing, and moral judgment (Irving

Janis, 1972, p. 9).


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GroupThink

The key factor that causes Groupthink is when thecrowd is homogeneous.

If all members think and act the same this can lead togroupthink, as can be seen in highly regulatedorganisations like the army.

To harness the power of the wisdom of crowds youreally need diversity, the nay-sayers, the moaners andcomplainers, and the crazy optimists, the fools, thehappy-go-luckies you need the whole mix.


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Consequences of GroupThink

Pearl Harbour

The Bay of Pigs Failed Rescue Attempt of Hostages at US

Embassy in Iran

US Invasion of Iraq


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Symptoms of GroupThink

Illusion of invulnerability

Collective rationalization

Belief in inherent morality

Stereotyped views of out-groups

Direct pressure on dissenters

Self-censorship Illusion of unanimity

Self-appointed mindguards


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Illusion of Invulnerability

Creates excessive optimism thatencourages taking extreme risks.


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Collective Rationalization

Members discount warnings and do notreconsider their assumptions.


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Belief in Inherent Morality

Members believe in the rightness oftheir cause and therefore ignore theethical or moral consequences of theirdecisions.


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Stereotyped Views of Out-groups

Negative views of enemy makeeffective responses to conflict seemunnecessary


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Direct Pressure on Dissenters

Members are under pressure not toexpress arguments against any of thegroups views.


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Self-censorship

Doubts and deviations from theperceived group consensus are notexpressed


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Illusion of Unanimity

The majority view and judgments areassumed to be unanimous.


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Self-appointed mindguards

Members protect the group and theleader from information that isproblematic or contradictory to thegroups cohesiveness, view, and/ordecisions


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Signs of GroupThink

Incomplete survey of alternatives

Failure to examine risks of preferred choices. Poor information search.

Selective bias in processing information at

hand.

Failure to work out contingency plans.


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What can we do ?


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What can we do ?

The manager/leader should assign the role of

critical evaluator to each member of the

crowd


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What can we do ?

The manager/leader should avoid stating

preferences and expectations at the outset


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What can we do ?

Each member of the group should routinely

discuss the groups' deliberations with a

trusted associate and report back to the

group on the associate's reactions


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What can we do ?

One or more experts should be invited to

each meeting on a staggered basis and

encouraged to challenge views of the

members


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What can we do ?

At least one member should be given the role

of devil's advocate (to question assumptions

and plans)


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What can we do ?

The manager/leader should make sure that a

sizeable block of time is set aside to survey

warning signals.


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Diversity (recap)

It not only contributes by adding different

perspectives to the group but also by making

it easier for individuals to say what they really

think.


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Good Crowd For Wisdom

Diversity of Participants

Independence of Opinion

De-Centralised Organisation


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A Bad Crowd

Problem Domain


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A Good Crowd

Problem Domain


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Crowds Wisdom?

A Village Population in the Middle AgesA Jury

Football Supporters

Gamblers

A Community of Practice


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The Wisdom of Crowds & KM

Helps convince KM Sceptics People are

your greatest Resource

Starting point for Community of Practice

Effective & Creative thinking techniques

increase the Crowds ability without the

additional resources


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EXERCISE - SMART HEART

and the Wars for Independent Thought
http://en.wikipedia.org/wiki/File:Battle_of_Bannockburn_-_Bruce_addresses_troops.jpg


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EXERCISE - SMART HEART ???

Identify People Process Technology?

Identify COP implementation weaknesses?

Is Nonakas Spiral in play - demonstrate?

Identify Creative Thinking Techniques?

Success Factors wisdom of army?

Barriers to English adopting same?

Apply PMI to Bruces approach?

crowd wisdom

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