Markets also work with idiots if the structure is right, says Nicholas Taleb
“If the market structure is right, a collection of idiots produces a well-functioning market. Researchers Dhananjay Gode and Shyam Sunder came to a surprising conclusion in 1993. Populate markets with actors who have no intelligence, that is, who buy and sell completely randomly, and that in a structure that maps tenders and offers in a meaningful way. Now guess what happens: We achieve the same allocation efficiency as if the market participants were intelligent.”
– Nassim Nicholas Taleb in his book “Skin in the Game – The Risk and its Price”, Penguin Publishing, page 134
