Are crowds wise or mad?
Wharton’s Ethan Mollick is undoubtedly one of my favorite thinkers, and I’ve written about a number of his papers previously, whether it’s on the role of middle managers in innovation, or how successful crowdfunding has been at picking winners (compared to traditional venture capital).
This apparent wisdom of crowds is something he has returned to for his latest paper, which looks at how successful crowds are versus experts in the funding of art.
The study measures the artistic judgment of the crowd versus a team of experts to see how closely they’re matched. The art in question was a collection of 120 theatrical ventures listed on Kickstarter.
There have been a number of studies down the years that highlight how effective the ‘uneducated masses’ tend to be when compared to an educated elite, and this one was no exception.
“On average, we find a remarkable degree of convergence between the realized funding decisions by crowds and the evaluation of those same projects by experts,” Mollick says. “Projects that were funded by the crowds received consistently higher scores from experts … and were much more likely to have received funding from the experts.”
How important crowdfunding is for arts funding
The study was inspired by the finding that more money is raised for artistic ventures via Kickstarter than via the National Endowment for the Arts, which is the primary way the US government gives money to the arts.
That obviously represents a sizable shift in how money is raised, so the authors were keen to explore what that meant. Were these new patrons ensuring the same quality of art? Does a greater range of art get funded?
The authors recruited a team of well established experts from the art world and asked them to judge the projects funded on Kickstarter. The aim was to see if they would have funded those projects via more official channels.
Interestingly there was indeed a broad level of consensus between the experts and the crowd. The experts agreed with many of the projects that got funded, and where disagreement existed, it was usually that the experts would not have funded a particular project. So, in reality, the crowd were ensuring a wider and more diverse range of projects received funding.
What’s more, the crowd also seemed a good judge of potential success, with a strong track record of picking ‘winners’ in terms of commercial or artistic success.
The study provides further insight into the potential for crowds to perform as well, if not better than, supposed experts. Certainly food for thought.
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