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Towards Complexity Adjusted Efficient Market Hypothesis

Last decades witnessed a rapid development of evolutionary models in different areas of economics. The standard textbooks in evolutionary game theory are. In evolutionary models players change their action gradually in response to their realized payoff and the behavior of the others. One advantage of these models is their ability to account explicitly for the interaction between the players. This ability can be of the outmost importance for the modelling of the financial markets. Indeed, [3] reported the following distribution of answers to the question: What first draw your attention to the company? Friend or relative (13%); worked for company (21%); broker (33%); spinoff of successful company (2%); someone involved with a company (3%); IPO-publicity (2%); periodicals-newspapers (6%); customer of a company (2%); stock was inherited or a gift (2%); performance of a similar company (0%); other (18%). Note that 19% of customers were attracted simply by word of mouth communication, while highly relevant factors (4) and (10) counted only for 2%. This means that social learning can be potentially important for the stock price behavior.

To read more click on https://www.omicsgroup.org/journals/towards-complexity-adjusted-efficient-market-hypothesis-9458-2-e119.php?aid=17042

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