Google is testing a system that competes with Wikipedia. There are two key differences in Google’s version. One is that authors of entries are identified. Second is that Google encourages competition among authors and will rank different pages about the same topic using some algorithm that it has developed. Another difference is that authors can put ads on their entries (surprise …!).

The second of these two innovations is the most interesting to me. The problem with Wikipedia is that it’s hard to judge the quality of entries unless you’re an expert on the subject, but if you’re already an expert, you probably don’t need to read about it on Wikipedia. To maintain high quality, Wikipedia depends on self-moderation by its authors — if someone writes some nonsense, another author is supposed to see that and correct it. Google, on the other hand, it not an expert about everything (yet …) but it is very good at ranking things. So instead of relying on a disorganised and decentralised process to rank results, Google generates a ranking using a centralised algorithm. Since most people already know that Google is good at ranking web search results, it can leverage this credibility to get people to trust its rankings of other things.

To me, it still seems to be an open question as to which process — centralised or decentralised — is better at sorting the good from the bad. For a decentralised system to work, it depends on the incentives of the individuals involved being aligned in the right way. This is hard to do, as websites like Digg have discovered. The ‘crowds’ are often quite good at sorting the good from the bad, but there are opportunities for gaming and other effects that let some bads get mixed up with the goods. A centralised process, on the other hand, perhaps lacks the flexibility to respond to changes, and is also prone to gaming once people figure out how the algorithm works, but may be easier to implement compared to setting up the right incentives for everyone.

In any case, it’s going to be a very interesting experiment to see which model performs better. The only problem is that Wikipedia already has a massive head-start, and I don’t know if authors of Wikipedia pages will want to switch to Google, even if they can earn ad revenues. On the other hand, since Wikipedia content is Creative Commons licensed, switching is more or less just a matter of copy and paste …

HT: CoreEcon