Infotopia: How Many Minds Produce Knowledge

Abstract

This book explores the human potential to pool widely dispersed information, and to use that knowledge to improve both our institutions and our lives. Various methods for aggregating information are explored and compared, including surveys, deliberation, markets (including prediction markets), blogs, open source software, and wikis. The success of surveys, in establishing what is true, can be explained by reference to the Condorcet Jury Theorem; but when most people are less than 50% likely to be right, the failures of surveys, in establishing what is true, can be explained in the same way. Deliberation is often celebrated as likely to counteract the problems in surveys. But deliberation itself creates serious risks, including amplification of errors, cascades, and group polarization. These risks produce blunders in many domains, including legislative institutions and the blogosphere; hence it is too simple to celebrate the Internet or the blogosphere by reference to Hayekian arguments about the dispersed nature of information in society. By contrast, markets, including prediction markets, often do remarkably well, for reasons sketched by Hayek in his examination of the price mechanism. Because of their ability to aggregate privately held information, prediction markets substantial advantages over group deliberation. Open source software and wikis have their own dynamic and create their own puzzles. Steps are explored by which deliberating groups obtain the information held by their members. These points bear on discussion of normative issues, in which deliberation might also fail to improve group thinking.

Keywords: Internet, information, cyberlaw, communications