Wisdom of Crowds Conditions (Diversity, Independence, Aggregation)

James Surowiecki's research showing that group predictions outperform individual experts, but only when three conditions are met: diversity of opinion (different information and perspectives), independence (people form opinions without social influence), and aggregation (a mechanism to combine individual judgments). When any condition fails—groupthink, herding, or no aggregation mechanism—crowds become worse than individuals. The model explains when to trust group judgment and when to be skeptical.

When to use it

When facing strategic decisions under uncertainty; when multiple stakeholders have competing interests; when the stakes are high and reversibility is low.

How it can help

Provides frameworks for navigating competitive landscapes, allocating resources under uncertainty, and making high-stakes decisions with incomplete information.