PX-8891 Price Chart — Market Price vs. True Probability
Market Price
True Probability
Reflexivity Gap
$0.22
Market Price
$0.22
True Probability
0%
Reflexivity Gap
0
Feedback Loops
What you're seeing: The green line is the true probability of
the underlying event. It doesn't change. The orange line is
the market price. When observation effects are enabled, each layer of observation creates
feedback: coverage drives trading, trading drives price, price drives more coverage. The gap
between the lines is pure reflexivity: the market pricing its own observation of itself.
The core insight: A 22% probability can climb to 67% through reflexive dynamics alone,
without any change in the underlying event. The market isn't wrong. It's pricing something real.
It's just not pricing what you think it is.