Discussion on whether AI can arbitrage away all market inefficiencies
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An author, drawing on views from "The Migration of Scarcity," questions the claim that AI trading bots will eventually eliminate all arbitrage opportunities in the market. The author says weather forecasts do not change the weather, but market forecasts are themselves part of the weather: forecasts choose among the states they describe, thereby becoming a kind of coordination. The author says this is the core statement of why he disagrees with the efficient market hypothesis (EMH).
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The author describes reading books to challenge his belief that AI trading bots will eventually eliminate all market edge, noting he has long disagreed with the Efficient Market Hypothesis, like Edward Thorp. He quotes a passage from "The Migration of Scarcity" arguing that a market forecast is part of the market rather than a description of an independent state, so forecasting becomes coordination.
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