Collectively, we know everything. This phrase is based on a simple theory from the book Wisdom of the Crowds by James Surowiecki. Individually, we all know something; we all take little bits of information, add them together, and collectively we all know everything. Sounds simple, but the tough part is extracting the “all-knowing” right answer out from the crowd.
Using this crowd-sourcing approach works well in a number of areas. One of the best ways this method is used is in sports betting. With sports betting, thousands of individuals bet what they know, for their own self-interest. They may be wrong individually, but if you average out the total bets you get another story. Collectively, by averaging the answers, you get the most accurate predictions on the games — in fact, often more accurate predictions than the experts themselves.