I really loved the book Superforecasting by Philip Tetlock and Dan Gardner. In response to US Intelligence agencies failings, the authors proposed that random control trial that would pit the intelligence services against everyday folks in a competition. Both groups were given the same challenges, such as would their be a confrontational in the South China sea in the next 12 months? Whilst the intelligence services would have a wealth of data to call upon, the control group would just have the media and internet. They wanted to see not simply who was more accurate in predicting these events, but also hoped the study would show why people were more accurate in predicting these events to improve future forecasting. Surprisingly, many, but not all, everyday folks did better than intelligence services. Not only this, they also improved considerably in their forecasting over time.
The heart of the book lies a dilemma about collective decision making which can be greater or less than the sum of its parts. The Wisdom of Crowds is a simple process where the average of multiple opinions is taken as the prediction. It assumes that everyone knows a little and this collective view point is therefore more accurate. However, group think is the opposite of this. This is when a group of too like-minded individuals move to a common and false consensus where there is a lack of challenge. This is very important in organisational development and how we arrive a good decisions.
An interesting study has been conducted to test these ideas. Which comes top? The Wisdom of Crowds or Groupthink? Click here to see the findings.
If you think that you have what it takes to become a superforecastor, then click here.