The wisdom of crowds theory states that a group of people is better at making a prediction or a decision than an individual. There is one condition for this theory to work - people have to make a choice individually, they can't exchange ideas beforehand. A mean of all choices gets calculated and shows the most accurate choice.
1st study: 1,000 questions and a big crowd
A study from 2019 asked close to two thousand participants to answer general knowledge questions from various topics. The goal was to test the wisdom of crowds theory with a big sample size and explore it further. It was done online. During the experiment:
- Participants were paid 2 cents per answered question with some additional rewards for good accuracy.
- There were one thousand questions in total but the participants could have stopped at any time.
- A time limit for each question was placed to discourage cheating.
The results of the experiment confirmed the wisdom of crowds theory - the answers to categorical questions from crowds were about 20 more accurate compared to individual answers. For open-ended questions, the crowd's accuracy was even higher.
2nd study: When do we trust crowds?
The second study conducted in 2009 explored how the size of the crowd determines the accuracy and trustworthiness of its answers. 80 people participated in the study. They had to predict the average January temperature of 20 US cities. Then they were shown an answer of a different group of people to make them rethink their choice (if they wanted to):
- In preparation for the study, 20 US cities were randomly selected.
- 15 students predicted their average January temperature.
- From those 15 student answers, groups of 1, 2, 4, and 9 were randomly created to generate the "answer of the crowd" which was shown to the participants of the study.
- During the study, participants tried to predict the average January temperature for the listed cities.
- Then they got a chance to look at the different answers that were made by a source of either 1, 2, 4, or 9 people and rethink if they want to update their answers.
The results of the study showed that:
- The bigger the group, the more accurate the answers, once again confirming the wisdom of crowds theory. The answers were about 25 percent more accurate in a group of 9 people compared to a group of 2 people.
- With the increase in crowd size, participants changed their answers to be closer to the crowd answer. Showing how crowd size determines how much people will trust its answers.
These studies show that making decisions or predictions within a group of people can be a great way to achieve a more accurate result and at the same time, people trust bigger crowds more.
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