Freshwater, Saltwater, and Deepwater: Efficient Market Hypothesis versus Behavioral Finance

Oxford University School of Geography and the Environment Working Paper No. 12-03

25 Pages Posted: 21 Feb 2012

See all articles by Dariusz Wojcik

Dariusz Wojcik

University of Oxford, St. Peter's College

Nicholas Kreston

University of Oxford, Worcester College

Sarah McGill

University of Oxford; University of Oxford - Smith School of Enterprise and the Environment

Date Written: February 21, 2012

Abstract

The efficient market hypothesis (EMH) and behavioral finance (BF) form the blame-hope axis of the ongoing soul-searching exercise in economics, which frequently refers to the ‘Chicago School’ and the ideological division between ‘freshwater’ and ‘saltwater’ universities. Citation analysis for 1965-2010 shows that these simple geographical anecdotes do not apply, as saltwater economists heavily cited the seminal EMH papers from the beginning, and vice versa. BF lags behind EMH in terms of the quantity, dynamics, scope, and international reach of citations. BF is far from stealing a march on the EMH, and the latter is still used as the benchmark.

Keywords: efficient market hypothesis, behavioral finance, Chicago School, Eugene Fama

JEL Classification: A14, B26, G02, G14

Suggested Citation

Wojcik, Dariusz and Kreston, Nicholas and McGill, Sarah M and McGill, Sarah M, Freshwater, Saltwater, and Deepwater: Efficient Market Hypothesis versus Behavioral Finance (February 21, 2012). Oxford University School of Geography and the Environment Working Paper No. 12-03, Available at SSRN: https://ssrn.com/abstract=2008788 or http://dx.doi.org/10.2139/ssrn.2008788

Dariusz Wojcik (Contact Author)

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

Nicholas Kreston

University of Oxford, Worcester College ( email )

Walton Street
Oxford, Oxfordshire OX1 2HB
United Kingdom

Sarah M McGill

University of Oxford - Smith School of Enterprise and the Environment ( email )

United Kingdom

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
741
Abstract Views
3,226
rank
43,801
PlumX Metrics