This is by no means a new idea Matt. I first came across it when I was studying for my MBA back in '98 or '99.
One cited example was prediction of American Football games. In a study the experimentors took a group of pundits, commentators etc. and amalgamated their predictions for a set of upcoming games - and the result was the average predictions computed from all of their predictions was very accurate - far more than any individual could have been.
The interesting point to note though is that when a sample of non-experts were tried they, or their combined predictions , were not accurate at all. It seems what is termed "competence" or a knowledge of the area under study is required for this to work.
This concept is used to talk about how open market forces are able to arrive at accurate stock prices for companies - reflecting the true "value" of a company, provided that the share dealers have a knowledge of the industry the companies work in. Of course you get problems when lots of dealers who don't have knowledge get involved, or other effects as you mention such as the influence of powerful members of a group.
This is by no means a new idea Matt. I first came across it when I was studying for my MBA back in '98 or '99.
One cited example was prediction of American Football games. In a study the experimentors took a group of pundits, commentators etc. and amalgamated their predictions for a set of upcoming games - and the result was the average predictions computed from all of their predictions was very accurate - far more than any individual could have been.
The interesting point to note though is that when a sample of non-experts were tried they, or their combined predictions , were not accurate at all. It seems what is termed "competence" or a knowledge of the area under study is required for this to work.
This concept is used to talk about how open market forces are able to arrive at accurate stock prices for companies - reflecting the true "value" of a company, provided that the share dealers have a knowledge of the industry the companies work in. Of course you get problems when lots of dealers who don't have knowledge get involved, or other effects as you mention such as the influence of powerful members of a group.
Fascinating stuff.