Optimal incentives for collective intelligence.

Collective intelligence is the ability of a group to perform more effectively than any individual alone. Diversity among group members is a key condition for the emergence of collective intelligence, but maintaining diversity is challenging in the face of social pressure to imitate one's peers. Through an evolutionary game-theoretic model of collective prediction, we investigate the role that incentives may play in maintaining useful diversity. We show that market-based incentive systems produce herding effects, reduce information available to the group, and restrain collective intelligence. Therefore, we propose an incentive scheme that rewards accurate minority predictions and show that this produces optimal diversity and collective predictive accuracy. We conclude that real world systems should reward those who have shown accuracy when the majority opinion has been in error.