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Evidence for ecological learning and domain specificity in rational asset pricing and market efficiency

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  • Goodman, James
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    Abstract

    This article is interested in how efficiently individuals can use available information, and if this will translate into efficient outcomes at the market level. Our use of available information in markets is further specified by evolutionary psychology and behavioral ecology, which extend core theory and evidence in behavioral finance throughout the reviewed literature. The survey of the social, biological and physical literature is integrative, and demonstrates how evolved design at the individual level can interact with a market environment that evolves as a complex adaptive system. In general, the analysis also highlights the central importance of complex systems in the study of rational and efficient markets.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

    Volume (Year): 48 (2014)
    Issue (Month): C ()
    Pages: 27-39

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    Handle: RePEc:eee:soceco:v:48:y:2014:i:c:p:27-39

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    Web page: http://www.elsevier.com/locate/inca/620175

    Related research

    Keywords: Efficient markets; Information theory; Behavioral ecology; Evolutionary psychology; Social-ecological systems;

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