The Wisdom of Crowds Hypothesis

https://astralcodexten.substack.com/p/who-predicted-2022

Last year saw surging inflation, a Russian invasion of Ukraine, and a surprise victory for Democrats in the US Senate. Pundits, politicians, and economists were caught flat-footed by these developments. Did anyone get them right?

In a very technical sense, the single person who predicted 2022 most accurately was a 20-something data scientist at Amazon’s forecasting division.

I know this because last January, along with amateur statisticians Sam Marks and Eric Neyman, I solicited predictions from 508 people. This wasn’t a very creative or free-form exercise - contest participants assigned percentage chances to 71 yes-or-no questions, like “Will Russia invade Ukraine?” or “Will the Dow end the year above 35000?” The whole thing was a bit hokey and constrained - Nassim Taleb wouldn’t be amused - but it had the great advantage of allowing objective scoring.