There is no evidence of prediction markets seriously failing in domains where dispersed information exists; attempts to inflate prices for candidates like Pat Buchanan and Hillary Clinton on the Iowa Electronic Markets failed because traders saw the inflation and profitably bet against it, straightening prices out.

factualpending

Speaker

Cass Sunstein

Evidence Quote

the behavioral critique of Hayek which is that the stock market prices can be wrong for non-trivial times periods of time seems not to have empirical support in the domain of prediction markets

Source

Sunstein on Infotopia, Information and Decision-MakingEconTalk
Created: 6/15/2026, 9:20:35 AM

My Notes

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