• 11. 8. 2025 • H. T. •
- The Ox Weight Guess (1906) Statistician Francis Galton observed that when 800 people guessed the weight of an ox at a country fair, the average guess was just 1 pound off the actual weight.
- In 1980s, finance professor Jack Treynor asked students to estimate how many jelly beans were in a jar. The actual count was 850. The average guess? 871, just 5% off the real number
These experiments are a glimpse into something powerful: crowd wisdom. When diverse minds come together, the aggregate insight often beats the expert.
Every trade is like a guess about an item’s value. Prices aren’t set by a central authority, but discovered through the aggregate beliefs and actions of participants. This process, known as price discovery, relies on the same crowd wisdom seen in those classic experiments.
For Crowd Wisdom to work we must have:
✅ Diverse opinions
✅ Independent thinking
✅ Decentralized decision-making
When Crowd Wisdom Breaks Down:
⚠️ Herd behavior
⚠️ Lack of diversity
That’s the recipe for smarter outcomes—whether you’re weighing oxen, counting jelly beans, or setting a value of … work-hour, for example.
