Wisdom of Crowds and the IEM

I’ve been reading James Surowiecki’s The Wisdom of Crowds, which argues that crowds — that is, diverse, decentralized, independent groups of individuals (in the right circumstances) — aren’t as dumb as you might think.

One example that New Yorker regular Surowiecki provides are the Iowa Electronic Markets (IEM), which are futures markets that deal in political and economic events. The project is designed to be a learning tool about real-world markets, but is also attracting considerable non-academic interest given this year’s presidential race.

Check out Kerry vs. Bush on IEM.