A Comparison of Small Crowd Selection Methods

The literature on the wisdom of crowds argues that in most situations, the aggregated judgments of a large crowd perform well relative to the average individual. There are, however, many real-world cases where crowds perform poorly. A small crowd literature has since developed, finding that better performing small crowds often exist within whole crowds. We compare previously proposed small crowd selection methods based on absolute or relative group performance to a new sequential search method and find that it selects better performing small crowds more consistently for forecasts of real gross domestic product (GDP) growth, inflation (measured by consumer price index, CPI), and unemployment rate made by US and Euro-zone surveys of professional forecasters.