How does Collective Intelligence beat Experts' view? [closed]

Question

I am interested in doing some Collective Intelligence programming, but wonder how it can work?

It is said to be able to give accurate predictions: the O'Reilly Programming Collective Intelligence book, for example, says a collection of traders' action actually can predict future prices (such as corn) better than an expert can.

Now we also know in statistics class that, if it is a room of 40 students taking exam, there will be 3 to 5 students who will get an "A" grade. There might be 8 that get "B", and 17 that got "C", and so on. That is, basically, a bell curve.

So from these two standpoints, how can a collection of "B" and "C" answers give a better prediction than the answer that got an "A"?

Note that the corn price, for example, is the accurate price factoring in weather, demand of food companies using corn, etc, rather than "self fulfilling prophecy" (more people buy the corn futures and price goes up and more people buy the futures again). It is actually predicting the supply and demand accurately to give out an accurate price in the future.

How is it possible?

Update: can we say Collective Intelligence won't work in stock market euphoria and panic?

Answer 1

The Wisdom of Crowds wiki page offers a good explanation.

In short, you don't always get good answers. There needs to be a few conditions for it to occur.