Is There Really Wisdom in the Crowd? Podcast and transcript:
Wharton's John McCoy discusses his research on a better way to crowdsource ideas.
As predictive analytics become more sophisticated, companies are increasingly relying on aggregated data to help them with everything from marketing to new product lines. But how much should firms trust the wisdom of the crowd? In his latest research, Wharton marketing professor John McCoy proposes a new solution for crowdsourcing that can help create better, more accurate results: Instead of going with the most popular answer to a question, choose the answer that is “surprisingly popular.” His paper, which was jointly written with Drazen Prelec and H. Sebastian Seung, is titled, “A Solution to the Single-question Crowd Wisdom Problem” and was published in Nature. He spoke to Knowledge@Wharton about why there’s plenty of wisdom in the crowd for those willing to ask the right questions.
An edited transcript of the conversation follows:
Knowledge@Wharton: The power of the crowd to make predictions or recommendations has gained wide acknowledgement in the past couple of years. Can you talk about how this has developed, where it’s being used and what some of the limitations are?
John McCoy: Many companies are using internal prediction markets to try and get a handle on good ways of drawing on the wisdom of all their employees, for instance. Government agencies are using the crowd to make good economic or geopolitical forecasts. I’m not sure that there are limitations to using the wisdom of the crowd, per se. I think the limitations are in some of the current methods for extracting wisdom from the crowd. For instance, many of the current methods, before we did our work, assume that often the majority is correct or assume that it’s easy to tell almost immediately who in the crowd is an expert. In fact, that’s often not the case. ..... "
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