under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them.
In that sense, the most mystifying thing about decision markets is how little interest corporate America has shown in them. Corporate strategy is all about collecting information from many different sources, evaluating the probabilities of potential outcomes, and making decisions in the face of an uncertain future. These are tasks for which decision markets are tailor-made.
What makes a system successful is its ability to recognize losers and kill them quickly. Or, rather, what makes a system successful is its ability to generate lots of losers and then to recognize them as such and kill them off. Sometimes the messiest approach is the wisest.
The fact that cognitive diversity matters does not mean that if you assemble a group of diverse but thoroughly uninformed people, their collective wisdom will be smarter than an expert’s. But if you can assemble a diverse group of people who possess varying degrees of knowledge and insight, you’re better off entrusting it with major decisions rather than leaving them in the hands of one or two people, no matter how smart those people are.