Wisdom of Strategically Diverse Crowds



    Department of Systems Engineering and Engineering Management

                       The Chinese University of Hong Kong


Date: Friday, March 10, 4:30 pm – 5:30 pm

Venue: ERB 513, The Chinese University of Hong Kong

Title: Wisdom of Strategically Diverse Crowds

Speaker: Prof. Jussi Keppo, National University of Singapore



This paper investigates the effect of crowd composition on the predictions made by individuals with private information. The individuals are heterogeneous in their external motivations, either tending towards conformity or contrarianism. We find that strategic tendencies become more extreme as the crowd becomes more conformist, and that a weakly contrarian crowd leads to the best performance for a randomly selected individual. When using simple averaging to combine individual predictions, a diverse crowd is never superior to a homogeneous one. We propose a clustering-based method to identify subgroups within the crowd and use weighted averaging to combine their predictions, taking into account the extent of private information sharing influenced by the different strategic motives. We demonstrate the effectiveness of the proposed method through a simulation study.


Professor Keppo teaches risk management and analytics courses, and directs analytics executive education programs at NUS Business School. He is also Research Director of the Institute of Operations Research and Analytics at NUS. Previously, he taught at the University of Michigan.
He has several publications in the top-tier journals such as Journal of Economic Theory, Review of Economic Studies, Management Science, Operations Research, and Journal of Business on topics such as investment analysis, banking regulation, learning, and strategic incentives. His research has been featured also in numerous business and popular publications, including the Wall Street Journal and Fortune.
Professor Keppo’s research has been supported by several Asian, European, and US agencies such as the National Science Foundation. He serves on the editorial boards of Management Science, Mathematics of Operations Research, and Journal of Risk. He has consulted several startups, Fortune 100 companies, and financial institutions.

Everyone is welcome to attend the talk!

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Friday, March 10, 2023 - 16:30 to 17:30