How Does Google Predict the Future? Up until now, we have examined how markets help allocate products or services to customers efficiently. One of the lessons in the earlier case studies and applications was that prices are a very useful tool in facilitating trades between buyers and sellers. In this lesson, we will explore another way that prices can be helpful in markets: in revealing information. At first glance, this role is not that obvious.
At first glance, this role is not that obvious. After all, a price is just a number, so how can it possibly transfer any information? Indeed, who is transferring this information and to whom?