wisdom of crowds

My next Bloomberg column comes out this weekend is now out here. I wanted to give readers some further detail on the experiments I wrote about in the column, experiments designed to test how social influence affects the Wisdom of Crowds phenomenon. I actually wrote about the experiments in this post last year, and that post gives quite a lot of detail.

I think it is the most illuminating set of experiments I have seen on this phenomenon. Most important in the current environment, it's pretty clear I think that one can't look to the wisdom of crowds as a mechanism to enforce any kind of "wisdom" on the part of the financial markets. (This doesn't mean they're always wrong either, of course.)