The Blue Eyes Puzzle requires you to be rational, trust others to be rational, trust others to trust others to be rational, and so on for a huge number of levels. This is not how the market behaves. Your average person doesn’t go through “I know you know I know” even once when deciding on whether to buy or sell stock.
The market merely averages everyones predictions, weighted towards those who are more sure and did better in the past. This makes it better than normal people in a lot of ways, but it isn’t going to go through mental hoops that the investors can’t fathom. Ergo, if it was working like this, everyone would know it.
Besides that, the common knowledge is merely that people are fairly rational. The time frame isn’t discrete. If there’s some mechanism that would make it’s direction turn based on whether the timing is even or odd, it will average out to nothing very quickly. If it’s just a question of how high it goes, it will go up now until it no longer is.
The Blue Eyes Puzzle requires you to be rational, trust others to be rational, trust others to trust others to be rational, and so on for a huge number of levels. This is not how the market behaves. Your average person doesn’t go through “I know you know I know” even once when deciding on whether to buy or sell stock.
The market merely averages everyones predictions, weighted towards those who are more sure and did better in the past. This makes it better than normal people in a lot of ways, but it isn’t going to go through mental hoops that the investors can’t fathom. Ergo, if it was working like this, everyone would know it.
Besides that, the common knowledge is merely that people are fairly rational. The time frame isn’t discrete. If there’s some mechanism that would make it’s direction turn based on whether the timing is even or odd, it will average out to nothing very quickly. If it’s just a question of how high it goes, it will go up now until it no longer is.