In particular, I’d appreciate more examples of prediction systems making the world more predictable.
There is a possibly apocryphal anecdote about how, prior to the publication of the Black-Scholes model, option prices approximately reflected theory. After the publication of the model, option prices precisely reflected theory because everyone was using the model to price options!
I have never been able to find a source for this story but it should be easy enough to verify through historical options data.
EDIT: I apparently failed to read as ... (read more)
There is a possibly apocryphal anecdote about how, prior to the publication of the Black-Scholes model, option prices approximately reflected theory. After the publication of the model, option prices precisely reflected theory because everyone was using the model to price options!
I have never been able to find a source for this story but it should be easy enough to verify through historical options data.
EDIT: I apparently failed to read as ... (read more)