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Markets process information

Sebastian Mallaby has much wisdom on how markets process information. My favorite part:

A long time ago, in a more aristocratic era, Henry David Thoreau
lamented that "the mass never comes up to the standard of its best
member." But in the age of the Internet, people are more inclined to
believe that the decentralized efforts of large groups can be better
than the work of experts. Wikipedia has edged out traditional
encyclopedias; eBay can value your car better than a local used-car
dealer. And politicians have a special reason to respect the wisdom of markets.
Amateur traders on the University of Iowa’s political futures market
predict elections more accurately than professional pollsters.


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