[extropy-chat] Wisdom of Crowds

[Robin Hanson]

On  5/15/2006, Hal Finney wrote:
>Economics teaches us that, modulo certain assumptions, this should
>happen to a much greater degree, to the point where it is basically
>impossible to disagree with the market consensus.  There is something of
>an unrecognized public goods problem here.  Bets that disagree with the
>market are harmful to the bettors but helpful to society.  Luckily, people
>haven't yet figured out this effect, so markets generally work well.

I'm not sure I agree with your summary.   It is true that contributing info
to a common estimate is a public goods problem, and so we should
expect rational people to under-contribute.   What is less clear is whether
irrational overconfidence people on net increase or decrease the quality
of common info via their actions.


Robin Hanson  rhanson at gmu.edu  http://hanson.gmu.edu
Associate Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326  FAX: 703-993-2323