Predicting market price discovery is primarily driven by 3% of informed traders.

A recent paper by researchers from London Business School and Yale University points out that the accuracy of market predictions is primarily driven not by "collective intelligence," but by a small number of informed traders. The study shows that only about 3% of accounts contribute significantly to price discovery and are more effective at predicting outcomes, responding to news, and improving market pricing accuracy. The paper also notes that the majority of other participants contribute the majority of trading volume, but have limited information content, and their trading losses often flow to informed traders. The research concludes that the accuracy of market predictions is more a reflection of the "wisdom of the informed minority."