“Charlie Chaplin once entered a Charlie Chaplin look-alike contest in Monte Carlo and came in third; that’s a story.” – Movie line from “Lucky Number Slevin”

This myth has been out in the public since the before the 1920’s. It has never been verified or reported as being true in any Chaplin biography, yet it continues to hold the attention of many when it is heard. It provides a cautionary warning about how we perceive in competitive group dynamics. Call this a variation of the Keynes beauty pageant story.

According to Keynes,

“… each competitor has to pick, not those faces that he himself finds prettiest, but those that he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view . . . We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practise the fourth, fifth, and higher degrees.”

In the Chaplin story, the objective is not to find a crowd’s ideal of beauty but find the right Chaplin in a crowded field of Chaplin. (This story should have been known by many around the world including Keynes in the 1920’s.) We pick who we think Charlie Chaplin should be based on our perception, but more importantly, our perception of what others think Chaplin should look like, the common knowledge of Chaplin. Our guess is a combination of our private knowledge and the common knowledge of being the ideal Charlie Chaplin.

There could have been many trying to compete to be Charlie Chaplin. These close approximations may all seem plausible but still generate noise and uncertainty with reality. We are often fooled by what we want to believe or a close approximation of what is true and not reality. Small differences in perception may lead our judging astray, yet in the end there is supposed to be only one right answer. It should not be presumed that following the consensus will be right. The consensus often follows what is the group ideal not reality. Interestingly, choosing the right Charlie Chaplin may not win the contest.

There is significant work on following crowds and using their averages to develop better forecasts as well as game theory work on higher levels of thinking. When information is limited, crowd following may be effective, but when there is a contest, the crowd can be biased and there is no substitute for deep learning and observation. Beware of crowd thinking or at least understand what is being asked of the crowd. Appreciate that uncertainty is everywhere in our decisions. Plausible choices may still be wrong.  Hedge your bets. Charlie Chaplin may not be viewed as Charlie Chaplin.