Another illustrative example of the flexibility of the “market” idiom is its use in Logical Induction (summary).
Markets can be viewed as a specific mathematical notion of “efficiency”. If we have some set of functions to optimize (agent-specific utility functions or entropy to maximize, or future surprise to minimize, in the case of prediction markets) and some limited resources whose different allocations correspond to different values for this set of functions (production capacities, knowledge, compute), then saying that something is “a market” is equivalent to saying that these resources are distributed as optimally as possible, given all the resource constraints involved.
In a way, the phenomenon described by the Efficient Market Hypothesis isn’t really a property of a market; it’s what a market fundamentally is.
Another illustrative example of the flexibility of the “market” idiom is its use in Logical Induction (summary).
Markets can be viewed as a specific mathematical notion of “efficiency”. If we have some set of functions to optimize (agent-specific utility functions or entropy to maximize, or future surprise to minimize, in the case of prediction markets) and some limited resources whose different allocations correspond to different values for this set of functions (production capacities, knowledge, compute), then saying that something is “a market” is equivalent to saying that these resources are distributed as optimally as possible, given all the resource constraints involved.
In a way, the phenomenon described by the Efficient Market Hypothesis isn’t really a property of a market; it’s what a market fundamentally is.