In Hayek's account, knowledge is consolidated via prices and arbitrageurs, who trade products, services and financial securities, not binary bets.

True: Hayek's writings (e.g. 'The Use of Knowledge in Society', 1945) present prices, and people who exploit price differences or arbitrage ('arbitrageurs' or very similar wording), as how dispersed knowledge is put together, and the activity described involves goods, services or securities rather than binary bets. Mostly true: Hayek clearly makes the price-system point, but 'arbitrageurs' is a paraphrase (e.g. he speaks of the 'arbitrageur' only in passing, or of traders or entrepreneurs), so the claim's '(his words)' is slightly off. Mixed: the price-system point is accurate, but the arbitrageur element or the products-versus-binary-bets contrast is not supported by Hayek's text. Mostly false: Hayek discusses knowledge and prices, but the claim misrepresents his mechanism. False: Hayek does not attribute the consolidation of knowledge to prices or arbitrageurs.

Set before the research began.

1. E1 [PDF] The Use of Knowledge in Society F. A. Hayek The American ... Yale University Department of German (hosting a scanned copy of Hayek, American Economic Review, Vol. 35, No. 4, Sep. 1945, pp. 519-530) · September 1945

   “or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.”

2. E2 [PDF] The Use of Knowledge in Society F. A. Hayek The American ... Yale University Department of German (hosting a scanned copy of Hayek, American Economic Review, Vol. 35, No. 4, Sep. 1945, pp. 519-530) · September 1945

   “It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers,”

3. E3 What (If Anything) is Wrong with High-Frequency Trading? Journal of Business Ethics (Springer) · 26 May 2022

   “Consequently, Hayek includes “the arbitrageur who gains from local differences of commodity prices” (1945, 522) in his list of socially useful people.”

In 'The Use of Knowledge in Society' (1945), Hayek describes the price system as a machinery for registering change and passing information to producers (E2). This supports the price-system point of the claim. Hayek does use the word 'arbitrageur', but only in passing: it appears in a list of people who use special knowledge of local circumstances, and the arbitrage it describes concerns differences in commodity prices, not binary bets (E1, E3). Because the arbitrageur is a passing example and not a stated mechanism for consolidating knowledge, the claim's '(his words)' framing slightly overstates Hayek's text, which matches the criteria for mostly true.