Anomalies in Economics and Finance
Christopher L. Gilbert
Università degli Studi di Trento - Department of Economics
March 2, 2011
The term “anomaly” played a crucial role in Thomas Kuhn’s characterization of scientific progress. For Kuhn, an anomaly is a puzzle which challenges an accepted paradigm. Puzzles only achieve anomalous status once an alternative paradigm becomes available which allows explanation of the puzzle. Anomalies were introduced into the finance literature by Michael Jensen but more as resolvable puzzles than Kuhnian anomalies. They entered economics via Richard Thaler who saw behavioural economics as the alternative to the neoclassical paradigm. Both authors use the term anomaly in a deliberately Kuhnian manner. Kuhn formulated his ideas by looking back across the history of physics. By contrast, behavioural economists use Kuhn’s concepts in a forward-looking manner as a marketing tool for their ideas.
Number of Pages in PDF File: 27
Keywords: anomaly, behavioral, effects
JEL Classification: B23, B41working papers series
Date posted: February 10, 2011 ; Last revised: March 3, 2011
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