The 'Wisdom of the Crowds' and Public Policy
Surowiecki (2004) argues that collective predictions are better than individual predictions and calls that the Wisdom of the Crowds. We use an analytical information model to demonstrate and explain this. Then we see how these two predictions are affected by better public information and show that while individual predictions always improve, collective ones do not. A social planner that relies on collective predictions to form policy may erroneously refrain from providing better information. We use two examples to show where this might be applicable.
|Date of creation:||Feb 2009|
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- Maria Demertzis & Nicola Viegi, 2008.
"Inflation Targets as Focal Points,"
International Journal of Central Banking,
International Journal of Central Banking, vol. 4(1), pages 55-87, March.
- Maria Demertzis & Nicola Viegi, 2005. "Inflation Targets as Focal Points," Working Papers 02, Economic Research Southern Africa.
- Maria Demertzis & Nicola Viegi, 2005. "Inflation Targets as Focal Points," Money Macro and Finance (MMF) Research Group Conference 2005 52, Money Macro and Finance Research Group.
- Maria Demertzis & Nicola Viegi, 2004. "Inflation Targets as Focal Points," DNB Working Papers 017, Netherlands Central Bank, Research Department.
- Maria Demertzis & Marco Hoeberichts, 2006.
"The Costs of Increasing Transparency,"
DNB Working Papers
080, Netherlands Central Bank, Research Department.
- Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
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