Brexit, Perfect Information and the Wisdom of Crowds: when it works and when it doesn’t…
Mark L | CMO/co-founder
If you’re a dedicated Pynkster and follow us across our Twitter page and Facebook Community, you will have seen we ran a Wisdom of Crowds (WoC) experiment a few weeks back by asking random members of the public to guess how many jelly beans were in the jar.
The rules of the game are simple. We filled and oddly shaped, transparent, glass carafe full of jelly beans and asked individuals to guess the number of beans inside. The reason we used an oddly shaped vessel was to avoid simple volume calculations.
To be consistent with the WoC methodology - we were careful not to let anyone else hear another’s submission and ensure they were recorded anonymously.
Our plan was to run the experiment in our office first, record the results, and then to run the experiment online. We have run similar experiments before and the accuracy of the Crowd has always been impressive, as Sir Francis Galton found out when asking nearly 800 participants from his local village to guess the weight of an Ox.
In that famous example — the median guess came within 0.8% of the true weight of the Ox (1207 lbs). This observation became the basis of Galton’s work on central tendencies, variance and standard deviation.
The results of our Jelly Bean office experiment were not quite as accurate, but impressive nevertheless. The total number of beans in the jar was 1,089 and the people in our office predicted a guess error rate -3.4%. Pretty Good!
However, people who tried to guess via our online video competition didn’t fare so well. The Pynksters we polled online predicted with a mean error rate of +15.88%. When it comes to the Wisdom of Crowds methodology, that’s a clear example of imperfect information skewing the results.
THE BROADER PROBLEM OF IMPERFECT INFORMATION
This is an interesting phenomenon that we see in everyday life and a potential problem when taking into account the direct influence of modern day media on democracy and its influence on the electorate.
I was living in Shanghai when the Brexit vote was taking place and on return to the UK was asked whether I was a ‘Brexiteer’ or ‘Remainer’ on an almost weekly basis. Having observed from afar, my response at the time was how would any UK citizen be well enough informed to make such an important decision based on the information presented in the media?
Incredibly, there are no UK standards for political advertising resulting in wild and misleading claims from both the leave and remain camps.
Without perfect information, how can the voter possibly make an informed choice? A friend and business associate of mine Alex Tait is co-founder of The Coalition for Reform in Political Advertising; a neutral organisation that is campaigning for much needed advertising standards in UK politics — surely a cause worth supporting, no matter your political view point. We hope to have Alex join us on our Pynk Tank show some time this year, so stay tuned for that.
CONTEST WINNERS
On a less serious note (!!) and despite the imperfect information presented in our online competition, we would still like to reward the winners. If your name is below we will be in contact shortly with your prize.
Best Predictor and winner of $25 USD: Mihail Zotov (predicted 1,100 Jelly Beans)
5 random winners who ‘beat the boss’ and each win $5:
Pauline Rose C. Malate
Craig Myers
Roozbeh Tabaie
Christopher Mercado
Douwe Relborg
For more on Wisdom of Crowds methodology and how we are using it here at Pynk see this answer on Quora. Whether you’re an investment expert, a techy, entrepreneur or simply passionate about a better way of doing things — then get in touch. Sign up at Pynk today, subscribe to our Pynk Tank channel or slide into our Telegram group.
Mark L
Disclaimer: Please bear in mind that this information does not constitute any form of advice or recommendation by Pynk One Ltd. and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. When investing, your capital is at risk and you may recover less than the initial investment.
