The Wisdom of Crowds

As networks of people grow larger, they will usually tend to converge on an accurate understanding of information distributed among them, says a new M.I.T. study.

If a handful of people in a population exert an excessive influence on those around them, a 'herding' instinct can kick in, and people will rally around an idea that could turn out to be wrong. .... In a paper to be published in the Review of Economic Studies, researchers from M.I.T.’s Departments of Economics and Electrical Engineering and Computer Science have demonstrated that, as networks of people grow larger, they’ll usually tend to converge on an accurate understanding of information distributed among them, even if individual members of the network can observe only their nearby neighbors. A few opinionated people with large audiences can slow that convergence, but in the long run, they’re unlikely to stop it.

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