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The effects of intelligence on price discovery and market efficiency

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  • Yeh, Chia-Hsuan
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    Abstract

    The influence of speculation on market performance has long been discussed. Under the framework of bounded rationality in which traders are endowed with different intelligence levels in terms of different learning styles or different representations of intelligence, we examine the effects of traders' intelligence on price discovery based on "intraday" data, and market efficiency. We find that intelligence does help improve market performance. However, the influence of different intelligence levels on the market crucially depends on the characteristics of learning styles or the representation of intelligence.

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    File URL: http://www.sciencedirect.com/science/article/B6V8F-4SYTC56-1/2/ddc312455211b726d20cdcb236cfc8c2
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 68 (2008)
    Issue (Month): 3-4 (December)
    Pages: 613-625

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    Handle: RePEc:eee:jeborg:v:68:y:2008:i:3-4:p:613-625

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    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: Intelligence Speculation Artificial stock market Agent-based modeling Genetic programming;

    References

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    Cited by:
    1. Chia-Hsuan Yeh & Chun-Yi Yang, 2013. "Do price limits hurt the market?," Journal of Economic Interaction and Coordination, Springer, vol. 8(1), pages 125-153, April.
    2. Yeh, Chia-Hsuan & Yang, Chun-Yi, 2010. "Examining the effectiveness of price limits in an artificial stock market," Journal of Economic Dynamics and Control, Elsevier, vol. 34(10), pages 2089-2108, October.

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