Wisdom of Crowds

Sample Solution

Explanation: Intelligence is not a necessary condition for wisdom of crowds. In fact, a crowd made up of only intelligent people can be more susceptible to groupthink and other biases. It is the diversity of opinions and perspectives within a crowd that gives it its wisdom. The other four characteristics listed are all essential for wisdom of crowds:

• Diversity: Each person has private information and opinions. This allows the crowd to draw on a wider range of knowledge and perspectives.
• Independence: People's opinions aren't determined by the opinions of those around them. This ensures that the crowd's decision is not influenced by groupthink or other biases.
• Decentralization: People are able to specialize and draw on local knowledge. This allows the crowd to leverage the expertise of its members and make better decisions.
• Aggregation: A mechanism exists for turning private judgments into a collective decision. This allows the crowd to combine its individual judgments into a single, more accurate decision.

Examples: One example of wisdom of crowds is the stock market. The stock market is made up of millions of individual investors, each with their own private information and opinions. When these investors make decisions about which stocks to buy and sell, they are essentially voting on the value of those stocks. The market price of a stock is then determined by the collective judgment of the crowd. Another example of wisdom of crowds is Wikipedia. Wikipedia is an online encyclopedia that is written and edited by volunteers from all over the world. Each volunteer has their own expertise and knowledge, and they contribute to Wikipedia articles based on their own research and understanding. The Wikipedia community then reviews and edits these articles to ensure that they are accurate and up-to-date. The result is a vast and comprehensive encyclopedia that is more accurate and reliable than any single expert could produce. Conclusion: Intelligence is not a necessary condition for wisdom of crowds. The four essential characteristics for wisdom of crowds are diversity, independence, decentralization, and aggregation.