Nonlinear Sciences – Adaptation and Self-Organizing Systems
Scientific paper
1999-12-08
Proceedings of the National Academy of Science, Vol . 96, p. 9991-9992
Nonlinear Sciences
Adaptation and Self-Organizing Systems
2 pages
Scientific paper
10.1073/pnas.96.18.9991
In this review article we explore several recent advances in the quantitative modeling of financial markets. We begin with the Efficient Markets Hypothesis and describe how this controversial idea has stimulated a number of new directions of research, some focusing on more elaborate mathematical models that are captable of rationalizing the empirical facrts, others taking a completely different different tack in rejecting rationality altogether. One of the most promising directions is to view financial markets from a biological perspective and, specifically, with an evolutionary framework in which markets, instruments, institutions, and investors interact and evolve dynamically according to the "law" of economic selection. Under this view, financial agents compete and adapt, but they do not necessarily do so in an optimal fashion. Evolutionary and ecological models of financial markets is truly a new frontier whose exploration has just begun.
Farmer Doyne J.
Lo Andrew W.
No associations
LandOfFree
Frontiers of finance: Evolution and efficient markets does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.
If you have personal experience with Frontiers of finance: Evolution and efficient markets, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Frontiers of finance: Evolution and efficient markets will most certainly appreciate the feedback.
Profile ID: LFWR-SCP-O-23333