Social Network Analysis: Wisdom or madness of crowds?

Today, we’ll talk about wisdom of crowds and madness of crowds. Not all crowds generate wisdom. They sometimes create pure madness. Under what conditions do crowds generate wisdom? And under what conditions do crowds generate madness? The argument for the wisdom of crowds can be traced back to an article published in Nature at the beginning of the 20th century. The title of the article is “vox populi” which is the Latin term “voice of people.” But more than 40 years before Francis Galton’s published article on “vox populi” in Nature, Charles Mackay published a book titled “Extraordinary Popular Delusions and the Madness of Crowds”. The book was an early study of crowd psychology. Mackay presented a wide range of examples of the madness of crowds, including crusades, duels, economic bubbles, fortune-telling, and the influence of politics and religion on the shapes of beards and hair.
To make a decision collectively, there are three key components. They are (1) multiple individuals, (2) a choice set from which each individual chooses from, and (3) procedures and rules of aggregating individual preferences to a group decision. Using network science to study collective decision, you first consider multiple individuals as nodes. You need to have at least two nodes, otherwise it’s individual decision making. As we ensure diverse views in the group, we also need to be aware of equality bias. The first thing to consider is unanimity or majority. The rule of whether a group take a unanimous vote or a majority vote can make a difference in decision outcomes. Another thing to consider as you develop decision rules and procedures is to be aware of conformity effect. It refers to people’s tendency to conform to other people and social norms. If you can remove conformity effect and the problem of group polarization, you may still run into shared information bias in making collective decisions.

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