The Wisdom of Crowds Theory

The Wisdom of Crowds theory suggests that large groups of people can often make better decisions or predictions collectively than individuals alone, including experts. When diverse and independent opinions are aggregated, errors tend to cancel out, revealing a more accurate consensus. This principle explains why public estimates, market outcomes, and collective judgments can be surprisingly reliable, as long as the group is varied, independent, and not influenced by others. It highlights the power of collective intelligence in decision-making processes, emphasizing that a diverse crowd can sometimes outperform even expert predictions.