Fair.  It is encouraging to see that there is at least some solid theoretical foundation for an algorithmic prediction market though (vs. an actual order book of trades)

(Since, if you'll remember, one of my main critiques against prediction markets was lack of volume)


SimpleStacker

I haven’t seen any deep coverage of it.

My sense is that they’d note many of the same criticisms you’ve brought up and say that they’re an inherently flawed but potentially interesting source of information.

rely on fully rational agents who are able to do deep mathematical calculations

There are lots of econ experiments where subjects can figure out a nearly optimal strategy despite not knowing how to solve for the Nash Equilibria. It’s similar to how little kids can learn to catch a fly ball without knowing differential equations.

econ

Do Austrian economists like prediction markets?

I haven’t seen any deep coverage of it. 

My sense is that they’d note many of the same criticisms you’ve brought up and say that they’re an inherently flawed but potentially interesting source of information. 

> rely on fully rational agents who are able to do deep mathematical calculations

There are lots of econ experiments where subjects can figure out a nearly optimal strategy despite not knowing how to solve for the Nash Equilibria. It’s similar to how little kids can learn to catch a fly ball without knowing differential equations. 