This chapter focuses on the geometry of how a market can solve systems of equations from market jaws to the newton method. Since market equilibrium can be interpreted as a solution to a system of equations, price discovery, as it called in the language of market makers, can be viewed as having...

Prediction markets are a popular structure for a collective intelligence platform. The exact mechanism by which information known to the participating traders is incorporated into the market price is unknown. This paper demonstrates a novel method derived from the Kyle (1985) model for price...

This study tests the rationality of the decisions to purchase information, the informational efficiency of prices, and the optimality of the resulting allocations with a series of laboratory experiments in decentralized markets. The theory predicts that markets with dispersed information and...