Click to login and read the full article.
Don’t have access? Click here to request a demo
Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
EMEA: +44 0207 139 1600
Abstract
Most people will agree that markets are complex systems, but they usually pay just lip service to it. Until now, in financial economics, a mechanics paradigm has prevailed. Taking complexity seriously, some fundamental convictions have to be questioned. For an investor, the relationship between information and performance cannot be linear; a lousy analyst may systematically outperform a highly skilled one; if investors stop to gather information, the market may improve its informational efficiency; if the quality of financial reporting is improved, its addressees are not better off; and so on. If we want to understand markets, we have to address market systems, in which autonomous agents act independently and not as representative agents who all take the same actions. The most appropriate methodology to achieve this goal is agent-based simulation. There is no silver bullet for investment success. This holds, too, for the widespread belief that one should be well-informed before making investment decisions.
- © 2022 Pageant Media Ltd
Don’t have access? Click here to request a demo
Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600