Note: This is post #20 in a weekly video series on basic microeconomics.
Prices can convey information about events. But can they even predict the future? Can we predict Middle East politics based on the price of oil futures? Or use a price-based system to predict the outcome of presidential elections?
In this video by Marginal Revolution University, economist Tyler Cowen discusses prices and prediction markets and how they are used to make prediction about real-world events.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Previous in series: Is economic speculation immoral?