What is 'dumb agent theory' in economics?

This refers to the hypothesis that decisions made by groups of individuals turn out to be better than the decisions taken by isolated individuals. It is used to emphasise the wisdom of crowd knowledge. The dumb agent theory has been used in support of the efficient market hypothesis which states that the the prices of securities properly reflect their true underlying value. It has also been applied in the field of prediction markets where the wisdom of the crowd, rather than an individual, is employed to forecast the future to the best possible accuracy level. The idea was first conceptualised by American journalist James Surowiecki.