IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-031-21863-7_8.html
   My bibliography  Save this book chapter

A New Foundation for Financial Markets and Social Science

In: Finance's Wrong Turns

Author

Listed:
  • Richard O. Michaud

    (New Frontier Advisors)

Abstract

In the mid-1960s, finance took a critical wrong turn that fundamentally affected the value of theory and the investment effectiveness of quantitative tools for asset management. This was unfortunate since a more reliable foundation had been proposed by MarkowitzMarkowitz, H. (Journal of Finance 7(1): 77–91, 1952) and developed in MarkowitzMarkowitz, H. (Portfolio Selection: Efficient Diversification of Investments, 2nd ed. New York and Cambridge, MA: Wiley and Basil Blackwell, 1959). In addition, neoclassical finance, the dominant theory of modern financeModern finance for more than sixty years, was also based on expected utilityExpected utility axioms now understood as a flawed investor decision-making framework with major negative consequences for much of investment technology in current practice.

Suggested Citation

  • Richard O. Michaud, 2023. "A New Foundation for Financial Markets and Social Science," Springer Books, in: Finance's Wrong Turns, chapter 0, pages 105-121, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-21863-7_8
    DOI: 10.1007/978-3-031-21863-7_8
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-031-21863-7_8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.