Rethinking the Efficient Markets Hypothesis
affiliation not provided to SSRN
February 5, 2012
We develop an adaptive learning game to rethink the efficient markets hypothesis using the stochastically stable state of this game to characterize a richer set of market states than those suggested by the hypothesis. In particular, the model predicts that the economy may follow a path leading to bubbles.
Number of Pages in PDF File: 34
Keywords: efficient markets hypothesis, limits to arbitrage, adaptive learning
JEL Classification: C22, C73, G12, G14, G17working papers series
Date posted: February 8, 2012
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