Adaptive Markets
Financial Evolution at the Speed of Thought
2nd Edition
Published on 14. May 2019
Book
Paperback/Softback
504 pages
978-0-691-19136-2 (ISBN)
Description
A new, evolutionary explanation of markets and investor behavior
Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe. The debate is one of the biggest in economics, and the value or futility of investment management and financial regulation hangs on the answer. In this groundbreaking book, Andrew Lo transforms the debate with a powerful new framework in which rationality and irrationality coexist-the Adaptive Markets Hypothesis. Drawing on psychology, evolutionary biology, neuroscience, artificial intelligence, and other fields, Adaptive Markets shows that the theory of market efficiency is incomplete. When markets are unstable, investors react instinctively, creating inefficiencies for others to exploit. Lo's new paradigm explains how financial evolution shapes behavior and markets at the speed of thought-a fact revealed by swings between stability and crisis, profit and loss, and innovation and regulation. An ambitious new answer to fundamental questions about economics and investing, Adaptive Markets is essential reading for anyone who wants to understand how markets really work.
Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe. The debate is one of the biggest in economics, and the value or futility of investment management and financial regulation hangs on the answer. In this groundbreaking book, Andrew Lo transforms the debate with a powerful new framework in which rationality and irrationality coexist-the Adaptive Markets Hypothesis. Drawing on psychology, evolutionary biology, neuroscience, artificial intelligence, and other fields, Adaptive Markets shows that the theory of market efficiency is incomplete. When markets are unstable, investors react instinctively, creating inefficiencies for others to exploit. Lo's new paradigm explains how financial evolution shapes behavior and markets at the speed of thought-a fact revealed by swings between stability and crisis, profit and loss, and innovation and regulation. An ambitious new answer to fundamental questions about economics and investing, Adaptive Markets is essential reading for anyone who wants to understand how markets really work.
Reviews / Votes
"Winner of the 2018 PROSE Award for Excellence in Social Sciences, Association of American Publishers" "Winner of the 2018 PROSE Award for Business, Finance & Management, Association of American Publishers" "Finalist for the 2017 TIAA Paul A. Samuelson Award, TIAA Institute" "Shortlisted for the 2017 Financial Times and McKinsey Business Book of the Year Award" "One of the CNBC 13 Best Business Books of 2017" "One of Foreign Affairs Best of Books 2017 - Economic, Social, and Environment / Finance" "One of The New York Times Deal Book "Business Books Worth Reading" 2017 (chosen by Andrew Sorkin)" "One of Exame's "9 books that will help you get rich in 2018"" "One of MoneyWeek's "Five of the best books of 2017" (chosen by Dr. Matthew Partridge)" "One of The Wall Street Journal's What Business Leaders Read in 2017" "One of the Microsoft Best Business Books of 2017" "One of Financial Times (FT.com) Best Books of 2017: Economics" "One of Bloomberg's Best Books of 2017, chosen by Vitor Constancio" "One of Bloomberg's Best Books of 2017, chosen by Robert Shiller" "[Adaptive Markets] is very well written, striking a right balance between education and teaching."---Mathis Moerke, Markets and Portfolio Management "[Adaptive Markets] delivers an important contribution to the ongoing discussion about the EMH in a very entertaining way."---Christoph Kaserer, Journal of EconomicsMore details
Edition
2nd edition
Language
English
Place of publication
New Jersey
United States
Target group
College/higher education
Product notice
Paperback (trade)
Illustrations
13 color + 28 b/w illus. 9 tables.
Dimensions
Height: 233 mm
Width: 156 mm
Thickness: 32 mm
Weight
791 gr
ISBN-13
978-0-691-19136-2 (9780691191362)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Other editions
Additional editions
E-Book
06/2019
2nd Edition
Princeton University Press
€22.49
Available for download
Person
Andrew W. Lo is the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management and director of the MIT Laboratory for Financial Engineering. He is the author of Hedge Funds and the coauthor of A Non-Random Walk Down Wall Street (both Princeton), among other books.