The wisdom of the crowds is an important aspect of Web 2.0. User generated meta-data such as deli.icio.us bookmark tags, Digg tags and Amazon reviews use the aggregate behavior of multiple people for content recommendation. Question answering sites like Yahoo Answers allow experts in the crowd to provide answers to questions. Wikipedia founder Jimmy Wales is planning a search engine that intends to replace algorithmic ranking of web pages with human rankings.

In all the above applications, the belief is that a collective can solve certain problems better than individuals (including experts). Combining classifiers is not new, techniques for combining weak classifiers that differ in mis-classifications to get a stronger classifier (using techniques such as boosting) is well known in the machine learning community. However, most of the evidence for crowds being better has so far been anecdotal.

It appears this is about to change and we could have a theory that allows us to understand in what situations the crowd is wise. This article by Michael Mauboussin (based on the book “The difference” by Scott Page) identifies three problem situations where the wisdom of the crowds might be useful. One is where many people in the crowd (but not all) know the answer to a problem. The second is when one person in the crowd knows the answer. The third is when no one knows the answer (a prediction problem) but the answers from multiple people is averaged to get a good prediction. This paper by Dennis Wilkinson and Bernardo Huberman of HP Labs postulates that the number of distinct editors for a Wikipedia article has a strong correlation to the quality of the article.

However, the crowd is by no means always wise. Stephen Dubner has this post on “herd mentality” where he describes how walking to the next bus stop (which was visible from the current one) allowed him to sit with his daughter instead of standing on the ride. One of the comments to his post mentions that people fear short or non-existent lines in a grocery store checkouts and prefer lines with a few people.

India’s disastrous performance in the cricket world cup has led to many fans criticizing the team selection committee. What we perhaps need is a way to select the Indian cricket team using the wisdom of the crowds.