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In particular, I’d appreciate more examples of prediction systems making the world more predictable.


There is a possibly apocryphal anecdote about how, prior to the publication of the Black-Scholes model, option prices approximately reflected theory.  After the publication of the model, option prices precisely reflected theory because everyone was using the model to price options!

I have never been able to find a source for this story but it should be easy enough to verify through historical options data.


EDIT: I apparently failed to read as far as the first comment: