EconTalk Cass Sunstein on Infotopia, Information and Decision-Making
13 snips
May 14, 2007 
Cass Sunstein, University of Chicago legal scholar and author of Infotopia, explores how groups produce knowledge. He discusses prediction markets as incentive-based aggregators, the limits of deliberation like polarization and hidden profiles, and how wikis and institutional practices can better capture dispersed information.
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When Averages Beat Experts
- The statistical average of independent judgments often outperforms individual experts when errors are independent.
- Condorcet's theorem explains why larger groups of slightly-better-than-random judges yield near-certain correct majorities, shown by Galton-style examples.
Law Faculty Nailed The Derby Horse Weight
- Sunstein tested the horse-weight trick with University of Chicago Law faculty and the average 'nailed it.'
- He used this parlor-game to illustrate the aggregation mechanism rather than the topic's importance.
Crowds Fail When Biases Align
- Crowd wisdom fails when most participants share a systematic bias so errors don't cancel out.
- Sunstein gives a University of Chicago example: faculty nailed a horse weight but misestimated Supreme Court invalidations due to salience bias.
