The "Wisdom of Crowds" Is a Lie

Prediction markets claim to reflect the wisdom of the crowd.

But new research shows they actually reflect something else: power.

A study of 500 Polymarket contracts found that information doesn’t flow evenly. It cascades—from elite traders down through the system in predictable sequences.

– High-frequency traders move first

– Active traders follow

– Retail traders trail behind

This isn't a democratic market of independent thinkers. It's a hierarchical system where a small elite signals, and everyone else reacts.

The result? Accuracy that looks like crowd wisdom—but is really just a reflection of power.

New post out this Sunday on the myth of the crowd, and why we’re all speculating on uncertainty.