Tuesday, 8 May 2018

The Wisdom of Crowds

On the recommendation of a friend, I've been reading a book called Super-Forecasting by Philip Tetlock and Dan Gardner, which is an antidote to Nassim Nicholas Taleb. The thrust of the book is that it has been proven with trials that there are people who have a certain way of critical thinking that consistently makes them wizards at predicting outcomes of events.

The book goes on to explain that in probability theory there is a certain validity in the wisdom of crowds - the aggregation of information in groups, resulting in decisions that are often better than could have been made by any single member of the group. This has spurred me into ordering The Wisdom of Crowds by James Suroweicki from Amazon (delivered yesterday).

While there are certain categories of question that the Wisdom of Crowds is unsuited to, using the result of the referendum, the chances of Brexit being a success are 52% for and 48% against. Given that most of the reasons given in support of Brexit are based on emotional arguments - or lies, as we experts call them - even the best estimate of success can be no more than 50/50. The question is, on the basis of a 50/50 chance of winning a bet, would you risk your house on what is in essence the flip of a coin? I’d need something more like 80/20, or higher, to risk all, which is probably why we normally have supermajorities in referendums, especially ones with such profound consequences.

Brexit may just be one of those questions that crowd wisdom is not suited to, but I'll only know once I've read the book.

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