In 1907, Francis Galton asked participants at a county fair to estimate the weight of an ox. While most individuals guessed rather poorly, the median guess was within 1 percent of the ox’s true weight. It’s not a mysterious finding, as some people guess high and others guess low. When the group gets large, these cancel out and leave behind a better guess. Despite the simplicity, the implications are profound. Humans have the potential to make better choices when doing so collectively.
In the last few decades experimental and theoretical work has shown that collective wisdom is by no means guaranteed. The simple model demonstrated by Galton breaks down as soon as individuals begin to interact and share information. Whether or not the crowd is wise or foolish depends on the type of information individuals have, and is very sensitive to the network structure on which they interact. Unlike in Galton’s experiment, guesses can spread. A few loud, wrong individuals can be amplified and dominate the decision-making process.
More here – Scientific American