A prediction market with 17 possible outcomes
The platform Polymarket opened a prediction market on the 2026 Nobel Prize in Economics with 17 possible outcomes, and Argentina's president Javier Milei and his adviser Demián Reidel appear among the names that can attract bets. The market's description only states that there are 17 alternatives and names the two contenders leading the odds. Further down, Milei and Reidel appear among the enabled results for which users can take a position.[S1]
Among the options, the scenario with the strongest backing is Ariel Pakes, who holds 22% implied probability. David Autor sits second with 13%, according to the prices shown by the market, where each share represents a collective estimate that can change as users' expectations shift. The platform explains that shares of the winning outcome can be redeemed for USD 1 once the market resolves, and that its rules set the official sources and conditions needed to define the winner of each option, including possible special cases.[S1]
A separate report states that Milei appears among the options in the Polymarket market on the possible winner of the 2026 Nobel Prize in Economics with an indicated probability of 1%. The page shows Milei in the listing for the market Nobel Economics Prize Winner 2026 alongside other economists and academics. The figure comes from a prediction platform, so it reflects user movements and expectations but is not an official nomination or a communication from the Nobel committee. The market uses the official Nobel site as its resolution source and records 12 October 2026 as its closing date.[S2]
The paper behind the listing
The paper by both economists, titled Minimum Viable Scale: Extinction and Escape under Increasing Returns, argues that an economy can be too small to survive. The research questions the idea that all countries tend to converge and proposes that there is a minimum scale below which collapse is inevitable. The model starts from increasing returns, a logic opposite to the diminishing returns that dominate much of traditional microeconomics. Under that assumption, a rise in the scale of production can increase, rather than reduce, the return on the resources used.[S1]
The authors state that conventional tools are not enough to solve the problems that arise under that type of returns. The work uses non-concave dynamic optimization, Bellman barriers and computer-assisted proofs with exact arithmetic to analyze an economy's possible trajectories. The approach identifies three limits: the extinction threshold, the return floor and the takeoff threshold. The first represents a level of capital below which production cannot replace the economy's depreciation, so every trajectory ends at zero.[S1]
The return floor describes a different situation: a society can keep going without disappearing, yet fail to offer enough incentives to invest. The third limit appears when growth becomes the economically preferable decision over staying stagnant. Available work capacity holds a central place in the formulation. Milei and Reidel represent it through a parameter called L¯, which expresses how much work a society is willing to mobilize and which, according to the model, has an indispensable minimum value.[S1]
If that capacity falls below the floor set in the model, the set of sustainable economies disappears, regardless of the initial level of capital. The authors link that variable to the social valuation of effort and consider that a society that discourages work reduces its ability to sustain economic activity. Regulation also appears as a factor that can change the limits of viability. The paper calls a wedge the taxes, procedures or other interventions that stand between effort and its economic result.[S1]
Wedges, history and the Davos presentation
The argument holds that each wedge raises the minimum capital needed to survive and reduces the maximum sustainable level. Near the lower limit, even a small alteration can make an economy unviable that previously stayed within subsistence parameters. The document also states that there is a critical wedge beyond which no initial condition can avoid collapse. When increasing returns are moderate, that limit can be low, according to the theoretical development attributed to Milei and Reidel.[S1]
To explain their hypothesis, the authors turn to the historical evolution of production. They note that income per person stayed practically unchanged for much of history and that growth accelerated about two centuries ago with the expansion of the division of labor, machines and knowledge. The example cited refers to Adam Smith and his description of a pin factory in 1776. Ten workers, organized into 18 operations, could make 48,000 pins a day, while separately they would not have produced even 20 each per day.[S1]
Milei presented these ideas during the World Economic Forum in Davos in January 2026, where he linked them to his government program. There he said that politicians must stop bothering those who are making a better world. A separate report also mentions that sources said one of the methods would appear linked to the solution of one of the problems included in a series of 722 papers on mathematical challenges. According to that information, the result would be stronger than the initial evaluation, because the methods would extend to the full discounted game of manuscript 104, with both players and chance.[S1][S2]
The cited report mentions universal behavioral guarantees, exact failure thresholds, complete sets of optimal actions, exact discounted values, behavioral verification and a connection to Blackwell optimality. It also warns that the exact reward radius requires a separate enumeration, which can be exponential.[S2]
