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Mises and prediction markets: Can markets forecast?

Author

Listed:
  • Leonid Krasnozhon

    (Loyola University New Orleans)

  • John Levendis

    (Loyola University New Orleans)

Abstract

Ludwig von Mises’s methodological position is unique because it combines apriorism with qualitative empirical approach. Nonetheless, Mises’s adherents and detractors continue to characterize his apriorism as rejecting forecasting. This paper argues that a prediction market is a traditional market for forward-looking information; it leverages subjective knowledge and aggregates information via the market process to effectively solve the Hayekian knowledge problem. We argue that Austrian economists should embrace prediction markets as a powerful method of forecasting rooted in human action.

Suggested Citation

  • Leonid Krasnozhon & John Levendis, 2015. "Mises and prediction markets: Can markets forecast?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(1), pages 41-52, March.
    • Handle: RePEc:kap:revaec:v:28:y:2015:i:1:d:10.1007_s11138-013-0244-6
    DOI: 10.1007/s11138-013-0244-6
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    References listed on IDEAS

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    Cited by:

    1. Akhter Mohiuddin Rather & V. N. Sastry & Arun Agarwal, 2017. "Stock market prediction and Portfolio selection models: a survey," OPSEARCH, Springer;Operational Research Society of India, vol. 54(3), pages 558-579, September.

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