Slate is running an interesting dialog between Malcolm Gladwell and James Surowiekci, two of the New Yorker's best writers, and authors of the recent books Blink and The Wisdom of Crowds.
Blink is about instances when a snap judgement (relying on murky subconscious processes) may actually be superior to reasoned decision making. Surowiecki's book documents cases where the aggregate wisdom of many individuals is superior to that of a lone expert (the efficient market!). If the two notions seem hard to reconcile, join the club and read the dialog.
Surowiecki's thesis is one I've thought a lot about. In instances where the answer to a problem takes a fairly simple form ("What is the value of a share of Microsoft?" or "How many pennies are in this jar?"), it is plausible that the aggregation of all opinions eliminates biases in a useful way. While the market may be far from completely efficent, it is nevertheless hard to beat it consistently. (Don't try this with questions like "How do we reconcile quantum mechanics with general relativity?", though. In that case it might be better to ask the acknowledged expert than the crowd.)
On the other hand, I suspect that in many cases people's intuition is just plain bad, and systematic reasoning offers better results. (At least, that's my gut instinct ;-) For example, it is well documented from behavioral finance that people have a very bad innate understanding of probabilities and risk. This doesn't exclude the possibility that for certain questions, like "can I trust this guy with my girlfriend?", perhaps evolution has provided us with a lot of hard-wired machinery to quickly deduce the answer.
From David Brooks' review of Blink in the Times:
"Gladwell says we are thin-slicing all the time -- when we go on a date, meet a prospective employee, judge any situation. We take a small portion of a person or problem and extrapolate amazingly well about the whole. A psychologist named Nalini Ambady gave students three 10-second soundless videotapes of a teacher lecturing. Then she asked the students to rate the teacher. Their ratings matched the ratings from students who had taken the teacher's course for an entire semester. Then she cut the videotape back to two seconds and showed it to a new group. The ratings still matched those of the students who'd sat through the entire term."
Note added: the last election combined elements of Blinkish thin-slicing, as well as purported Wisdom of Crowds. It looks like the crowd trusted their gut instincts (rather than systematic reasoning?) and elected Bush. We'll see whether that was a better decision than an "expert" like me would have made ;-)
Thought provoking entry(as always!).
ReplyDeleteAs you noted, I find it hard (actually, impossible) that aggregate of non-experts would be better than an expert in certain types of questions, say in pure mathematics or theoretical physics.
On the other hand, when the system is so probabilistic with so many variables with unknown impacts, the average is likely to better than an "expert".
But then, can one really say they are "experts", who I would define to be one who knows all the variables and their possible impacts on outcomes. Likely, there are no (and can never be, I think)"experts", by such a stringent definition is most fields, like social sciences.
I think what it means is that "a little knowledge is more dangerous than total ignorance" :)
MFA
When oil was 12 dollars a barrel and evidently approaching 10 in 1999, the market had decided that the price was right. Any price was and in right, for a time. Analysts were singing songs of oil below 10 dollars. There were those who sold oil at 12 and those who bought. Buying was of course proper. There is no right or wrong price of oil, only a continually changing price that makes buyers and sellers right and wrong depending on future prices. Guessing at future prices allows a heck of a lot more reasonably astute people to be right than guessing at the coming year's flu virus strains.
ReplyDeleteAnne
I found "The Wisdom of Crowds" quite unconvincing. Mostly because it was argued from way too much of an anecdotal perspective. Clearly there are situations were the crowd is good and times when the crowd is not good. The weakness of the book was in not spending enough time covering when the crowd is not good. And further, if the idea of using the crowd for wisdom is to have any merit, you need to be able to predict before hand when the crowd will be good and when it will be bad. How do you do this?
ReplyDeleteDave Bacon
Having borrowed a copy of "Wisdom of Crowds," I realize freshly never ever pay attention to David Brooks. I gave way after 100 pages. There is no rigor in the argument, and limited charm to the anecdotes. This might make for a reasonable comic film, nothing more. there are times when crowds are right but times when wrong. Duh.
ReplyDeleteAnne
Does the size of a crowd matter :) ?
ReplyDeleteAnne
http://query.nytimes.com/gst/fullpage.html?res=9C00E5DA1039F935A35752C0A9639C8B63
ReplyDeleteHold That Thought: Haste Isn't All Waste
By JANET MASLIN
'Blink'
'The Power of Thinking Without Thinking'
By Malcolm Gladwell
Malcolm Gladwell, whose best seller ''The Tipping Point'' (2000) analyzed the means by which fads and ideas propagate, has written a similarly anecdotal account of how split-second decisions are made. In ''Blink,'' he finds scientists who break down the ostensibly simple processes of perception into quantifiable elements. He finds 90 different attributes ascribed to the Oreo cookie, and an extra $789 a year in salary for every extra inch of a tall person's height. He determines that people exposed to the words ''wrinkle,'' ''bingo'' and ''Florida'' can be made to feel old in a hurry.
Mr. Gladwell offers evidence that students can tell as much about a teacher in two seconds as they can in a semester. He finds a behavioral scientist who looks for 20 numbered elements -- whining is No. 11 -- in the way newlyweds discuss their smelly dog. He points out that surgeons who spend an average of three extra minutes talking to each patient are less likely than taciturn types to be sued for malpractice, regardless of what happens on the operating table. More intuitively, he knows ''why you can recognize Sally from the eighth grade 40 years later but have trouble picking out your bag on the airport luggage carousel.''
If the hypotheses of ''Blink'' are accurate, you may already have an opinion about whether Mr. Gladwell's second book interests you. Perhaps you also have a hunch about whether his thinking holds any surprises. Bear in mind that ''Blink'' takes a scientific approach to the following phenomena: that good-looking but incompetent politicians (like Warren G. Harding) can be elected to high office; that people think they favor one kind of mate but fall in love with another; that a mess in someone's bedroom exposes that person's hidden nature. In this context, the news that ''snap judgments are, first of all, enormously quick'' passes for a bright idea.
Anne
An alternate and more sound review.
ReplyDeleteAnne