Wise Democracy Victoria

Report from Caspar Davis: 

I have recently finished reading James Surowiecki's The Wisdom of Crowds ... a good read (Surowiecki is a staff wrier at the New Yorker) and a very interesting book.

Of course, I was interested to see how the book meshes with the work of Jim Rough and Tom Atlee. 

Although Surowiecki gives no sign of having heard of either of those people, or of their work, The Wisdom of Crowds explains very clearly how Co-intelligence works, why Dynamic Facilitation is such a powerful technique, and even why random selection is a brilliant way of choosing an effective deliberative group.

Surowiecki's book is based almost entirely on experiments conducted by academics. The main conclusions he draws are: (1) diverse groups are almost miraculously "smart". Collectively, they can find lost ships, or determine the number of beans in a jar or the weight of an ox, far more accurately than any expert; (2) not only are they smarter than their smartest members, but they actually get smarter when some of their members are not-so-smart; (3) the keys to collective intelligence are cognitive diversity, willingness to express opinions different from those already voiced, and a means of aggregating the different opinions.

These three points are all brilliantly addressed by Jim Rough's Dynamic Facilitation. See http://www.tobe.net/. See also Tom Atlee's comprehensive website, http://www.co-intelligence.org/

I think that The Wisdom of Crowds is one of the most important books I have read, in large part because of the main stream academic foundation it builds for Co-intelligence and Dynamic Facilitation. There is a good description of the book at http://www.randomhouse.com/features/wisdomofcrowds/Q&A.html

Here are some quotes that capture some of the book's most important points:

Diversity helps [groups distinguish good solutions from bad ones] in two ways. Diversity helps because it actually adds perspectives that would otherwise be absent and because it takes away, or at least weakens, some of the distractive characteristics of group decision-making. (p.29) [In the course of the book, Surowiecki makes it clear that he means cognitive diversity, not sociological diversity (although of course they often go hand-in-hand) - cwd]

...

[A] group made up of some smart agents and some not-so-smart agents almost always did better than a group made up just of smart agents. You could do as well or better by selecting a group randomly and letting it solve the problem as by spending a lot of time trying to find the smart agents and then putting them alone on the problem... Adding in a few people who know less, but have different skills, actually improves the group's performance. (p.30) ...

Legendary organizational theorist James G.

March... puts it like this: "The development of knowledge may depend on maintaining an influx of the naive and the ignorant and... competitive victory does not reliably go to the properly educated."... Homogeneous groups are great at doing what they do well, but they become progressively less able to investigate alternatives... Bringing new members into the organization, even if there are less experienced and less capable, actually makes the group smarter simply because what little the new members do know is not redundant with what everyone else knows. As March wrote, "[The] effect does not come from the superior knowledge of the average new recruit. Recruits are, on average, less knowledgeable than the individuals they replace. The gains come from their diversity." (p.31) ...

One obvious cost of homogeneity is... that it fosters the palpable pressures toward conformity that groups often bring to bear on their members… When the pressure to conform is at work, a person changes his opinion not because he actually believes something different but because it's easier to change his opinion them to challenge the group. (p.38) ...

Having even one other person in the group who felt as they did made the subject happy to announce their thoughts, and the rate of conformity plummeted.

Ultimately diversity contributes not just by adding different perspectives to the group but also by making it easier for individuals to say what they really think… [I]ndependence of opinion is both a crucial ingredient in collectively wise decisions and one of the hardest things to keep intact. Because diversity helps preserve that independence, it's hard to have a collectively wise group without it. (p.39) ...

Independence is important to intelligent decision making for two reasons. First, it keeps the mistakes that people make from becoming correlated. Errors in individual judgment won't wreck the group's collective judgment as long as those errors aren't systematically pointing in the same direction. One of the quickest ways to make people's judgements systematically biased is to make them dependent on each other for information. Second, independent individuals are more likely to have new information rather than the same old data everyone is already familiar with. The smartest groups, then, are made up of people with diverse perspectives who are able to stay independent of each other. Independence doesn't imply rationality or impartiality, though. You can be biased and irrational, but as long as you're independent, you won't make the group any dumber. (p.41) ...

[I]ndependence is hard to come by. We are autonomous beings, but we are also social beings.

We want to learn from each other, and learning is a social progress. The neighborhoods where we live, the schools we attend, and the corporations where we work shape the way we think and feel...

[T]he more influence a group's members exert on each other, the less likely it is that the group's decisions will be wise ones. The more influence we exert on each other, the more likely it is that we will believe the same things and make the same mistakes. That means it's possible that we could become individually smarter but collectively dumber. The question we have to ask in thinking about collective wisdom, then, is:

Can people make collectively intelligent decisions even when they are in constant, if erratic, interaction with each other? (pp.42-43) ...

If a group of autonomous individuals tries to solve a problem without any means of putting their judgments together, then the best solution they can hope for is the solution that the smartest person in the group produces, and there's no guarantee they'll get that. If that same group, though, has a means of aggregating all those different opinions, the group's collective solution may well be smarter than even the smartest person's solution. Aggregation ­ which could be seen as a curious form of centralization ­ is therefore paradoxically important to the success of decentralization. (p.75) ...

One of the consistent findings from decades of small group research is that group deliberations are more successful when they have a clear agenda and when leaders take an active role in making sure that everyone gets a chance to speak. (p.182) ...

[I]n small groups, diversity of opinion is the single best guarantee that the group will reap benefits from face-to-face discussion... (p.183) ...

[I]f a majority of the group already supports one position, then most of the arguments that will be made will be in support of that position. So the uncertain people are likely to be swayed in that direction, in part simply because that's more of what they'll hear. Similarly, people who have more extreme positions are more likely to have strong, coherent arguments in favor of their positions and are also more likely to voice them.

This matters because all the evidence suggests that the order in which people speak has a profound effect on the course of the discussion.

Earlier comments are more influential, and they tend to provide a framework within which the discussion occurs. As in an information cascade, once that framework is in place, it's difficult for a dissenter to break it down. This wouldn't be a problem if the people who spoke earliest were also more likely to know what they were talking about. But the truth is that, especially when it comes to problems where there is no obvious right answer, there's no guarantee that the most informed speakers will also be the most influential... (p.186)

Talkativeness may seem like a curious thing to worry about, but in fact talkativeness has a major impact on the kinds of decisions small groups reach. If you talk a lot in a group, people will tend to think of you as influential almost by default. Talkative people are not necessarily well liked by other members of the group, but they are listened to. And talkativeness feeds on itself. Studies of group dynamics almost always show that the more someone talks, the more he is talked to by others in the group. So people at the center of the group tend to become more important over the course of the discussion.

This might be okay if people only spoke when they have expertise in a particular matter. And in many cases, if someone's talking a lot it's a good sign that they have something valuable to add. But the truth is that there's no clear correlation between talkativeness and expertise... And since, as political scientists Brock Blomberg and Joseph Harrington suggest, extremists tend to be more rigid and more convinced of their own rightness than moderates, discussion tends to pull groups away from the middle. Of course sometimes truth lies at the extreme. And if the people who spoke first and most often were consistently the people with the best information on the keenest analysis, then polarization might not be much of a problem. But it is.

The obvious temptation is to do away with or at least minimize the role that small groups play in shaping policy or making decisions. Better to entrust one reliable person ­ who at least we know will not become more extreme in his views ­ with responsibility than trust a group of ten or twelve people who at any moment, it seems, may suddenly decide to run off a cliff. It would be a mistake to succumb to that temptation. First of all, groups can be, as it were, depolarized. In a study that divided people into groups of six while making sure that each group composed two smaller groups of three who had strongly opposed views, it was found that discussion moved the groups from the extremes and toward each other.

That same study found that as groups became less polarized, they also became more accurate when they were tested on matters of fact.

More important, as solid as the evidence demonstrating group polarization is, so too is the evidence demonstrating that nonpolarized groups consistently make better decisions and come up with better answers than most of their members, and surprisingly often the group outperforms even its best member. What makes this surprising is that one would think that in a small group, one or two confused people could skew the group's collective verdict in the wrong direction. (The small group can't, in that sense, rely on errors canceling themselves out.) But there's little evidence of that happening. (pp.188-189)

Most strikingly, there [is] no correlation between the performance of the smartest person in the group and the performance of out of the group and other. In other words, the groups were not just piggybacking on really smart individuals.

They genuinely were smarter than the smartest people within them.(p.190)

[In two experiments conducted by Princeton economists, it was found that] small groups made better decisions than individuals... and made them as quickly as the individuals. Most strikingly, there was no correlation between the performance of the smartest person in the group and the performance of that group. In other words, the groups were not just piggybacking on really smart individuals. They genuinely were smarter than the smartest people within them... (p.190)

Given what we've already seen, this is not shocking news. But there are two important things about these studies. The first is that the group decisions are not inherently inefficient. This suggests deliberation can be valuable when done well, even if after a certain point it's marginal benefits are outweighed by the costs. The second point is probably obvious, although a surprising number of groups ignore it, and that is that there is no point in making small groups part of the leadership structure if you do not give the group a method of aggregating the opinions of its members. If small groups are included in the decision-making process, then they should be allowed to make decisions. If an organization sets up teams and then uses them for purely advisory purposes, it loses the true advantage that it team has: namely, collective wisdom. (p.190)

Obviously, it economies and societies depend on, and thrive on, the disclosure of public information. What Andreassons and Treyner's experiments suggest, though, is that the best way to disclose public information is without hype or even commentary from people in positions of power... (p.255)

Groups are only smart when there is a balance between the information that everyone in the group shares and the information that each of the members of the group holds privately. It's the combination of all those pieces of independent information, some of them right, some of them wrong, that keeps the group wise. In the stock market, as we've seen, other people's expectations affect your own definition of value.

Much of the time that matters only a little, because the expectations themselves are competing. But what happens in a bubble ­ or what happens when the bubble bursts ­ is that expectations converge... It's already hard enough, as we've seen, for investors to be independent of each other. During a bubble, it becomes practically impossible. A market, in other words, turns into a mob. (p.256)