Fascinating insights into group dynamics. Debunks the myth that mobs are stupid. Under certain conditions, mobs make consistently better decisions than the smartest individuals in the mob.

Summary of what I’ve read so far:

• decision – choosing among a set of answers, form “how many marbles are in a jar” to “what was the most likely cause of the Challenger explosion”
• coordination – e.g. flock flight, pedestrian traffic, efficient transportation of goods to consumers. Achieved usually by letting individuals pursue their best interests, without information on the whole. For example, farmers grow oranges, packagers sell them to wholesalers, grocers buy them and sell them in stores, where shoppers finally enjoy the product. Each player in this chain makes decisions not on what’s best for everyone, but on what’s best for them. Yet, people are able to coordinate their economic activities remarkably well.
• cooperation – individuals working together to achieve a goal that benefits the entire group. Famous experiment: The ultimatum game

  A group of people are organized in pairs. One of the persons in the pair, the “proposer”, is given $10, and has to make this offer to the other person (who is given nothing): accept between $1 and $9, or refuse the deal. If the other person accepts, they receive the amount of money the proposer offered them, and the proposer keeps the rest. If the other person refuses, both lose all the money.
  If both players are completely rational, the proposer will make a low offer of $1, and the other person will take it. In practice, though, this rarely happens. Studies have shown that offers below $2 are routinely rejected. People prefer to practically give away money, rather than see their partner walk away with most of the $10. As a result, the proposers don’t make many low offers. In fact, the most common offer is $5.

• large enough
• diverse – a group of individuals with similar backgrounds and information will usually reach a suboptimal solution because it lacks the “alternative” information that diverse individuals bring
• independent – the more independent individuals in the group are from one another, the better the solution found by the group

Very thought-provoking book about group dynamics and how intelligence can arise out of groups. Also includes some interesting looks at when crowds FAIL to be wise and thus a good guide for avoiding group-think.Borrowed from PARC IC.