====== The Wisdom of Crowds II: Cognition ======

//Lecture on 11.10.2007//

{{hivemind:wisdom_of_crowds_2.ppt|Presentation}}

Cognition problems are problems that involve finding a definite answer. Under certain circumstances, groups perform extremely well in cognition problems; in others, not so well. During this class period, we looked at several different types of cognition problems and some methods to take advantage of group knowledge.

===== Guessing the amount of water in the Baltic sea =====

The students were asked to individually guess how many liters of water were in the Baltic Sea. The average answer was orders of magnitude off-target, although a couple individual answers were closer. This was most likely because of the corollary of the [[http://en.wikipedia.org/wiki/Condorcet's_jury_theorem|Condorcet Jury Theorem]], because we as a group of computer scientists have a very low percentage individually of being right. If we had been more people, there probably would have been an even less chance of being right.

===== Why do prediction markets work? =====
  * People put in effort voluntarily
  * Only people interested in the topic participate (helps to reach the >50% mentioned in the [[http://en.wikipedia.org/wiki/Condorcet's_jury_theorem|Condorcet Jury Theorem]])
  * Reaction on market changes is possible
  * It's not about the personal opinion but about "What does the majority think?"

===== Possible Prediction Market Questions? =====
  * Topics for upcoming examinations
  * When will the train conductor strike end?

===== Why do evolutionary systems get rejected? =====
"I arrive at this conclusion in a somewhat roundabout way. I have long been fascinated with systems that tap into the "wisdom of crowds" -- systems that, in fact, have much in common with Darwinian evolution. Such systems doubtfully conflict with anyone's religion, and yet, I see the same sort of resistance to them as I see to evolution. The arguments against them are remarkably similar." \\ (Rob Brown, [[http://karmatics.com/docs/evolution-and-wisdom-of-crowds.html]]


===== Weird thoughts =====
  * Are prediciton markets used e.g. by the big market researchers like [[http://en.wikipedia.org/wiki/Gartner|Gartner]]?


===== Links =====
  * [[http://groups.google.com/group/Prediction-Markets|Google Group Prediction Markets]]
  * [[http://upcoming.yahoo.com/event/130004|Yahoo Event about Prediction Markets]]