Frontiers of finance: Evolution and efficient markets
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 mod...
| Main Authors: | , |
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| Format: | Journal article |
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1999
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| _version_ | 1797062679440916480 |
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| author | Farmer, J Lo, A |
| author_facet | Farmer, J Lo, A |
| author_sort | Farmer, J |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-06T20:49:00Z |
| format | Journal article |
| id | oxford-uuid:36eeb8fe-0fa4-4e4f-b5e7-666bb30a4da3 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T20:49:00Z |
| publishDate | 1999 |
| record_format | dspace |
| spelling | oxford-uuid:36eeb8fe-0fa4-4e4f-b5e7-666bb30a4da32022-03-26T13:40:55ZFrontiers of finance: Evolution and efficient marketsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:36eeb8fe-0fa4-4e4f-b5e7-666bb30a4da3Symplectic Elements at Oxford1999Farmer, JLo, AIn 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. |
| spellingShingle | Farmer, J Lo, A Frontiers of finance: Evolution and efficient markets |
| title | Frontiers of finance: Evolution and efficient markets |
| title_full | Frontiers of finance: Evolution and efficient markets |
| title_fullStr | Frontiers of finance: Evolution and efficient markets |
| title_full_unstemmed | Frontiers of finance: Evolution and efficient markets |
| title_short | Frontiers of finance: Evolution and efficient markets |
| title_sort | frontiers of finance evolution and efficient markets |
| work_keys_str_mv | AT farmerj frontiersoffinanceevolutionandefficientmarkets AT loa frontiersoffinanceevolutionandefficientmarkets |