<abstract xmlns="http://www.w3.org/1999/xhtml"><p>While the interpretation of the EMH has changed over the last 50 years, its meaningfulness continues to define our view on how financial markets work. Competing approaches such as BFT and ACT have been proven to be in particular cases of an infinite spectrum of market states; all come under the framework of the AMH. The flexible framework of the AMH enables a trans-disciplinary approach for the study of financial system dynamics. An evolutionary and contextual view on financial systems allows researchers to use techniques and instruments from quantum mechanics and statistical physics to quantify volatility and provide an interpretation to the cognitive processes underlying investor decision making. Such a context also enables to tackle the interpretation of information processing at a cognitive level through consideration of quantum effects in the price formation mechanism.</p></abstract>

While the interpretation of the EMH has changed over the last 50 years, its meaningfulness continues to define our view on how financial markets work. Competing approaches such as BFT and ACT have been proven to be in particular cases of an infinite spectrum of market states; all come under the framework of the AMH. The flexible framework of the AMH enables a trans-disciplinary approach for the study of financial system dynamics. An evolutionary and contextual view on financial systems allows researchers to use techniques and instruments from quantum mechanics and statistical physics to quantify volatility and provide an interpretation to the cognitive processes underlying investor decision making. Such a context also enables to tackle the interpretation of information processing at a cognitive level through consideration of quantum effects in the price formation mechanism.

A Critical Review of the Main Approaches on Financial Market Dynamics Modelling

PhD Student, West University of Timisoara, Faculty of Economics and Business Administration, Blvd. Pestalozzi 16, Timisoara 300115,

Journal of Heterodox Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"A Critical Review of the Main Approaches on Financial Market Dynamics Modelling"}

While the interpretation of the EMH has changed over the last 50 years, its meaningfulness continues to define our view on how financial markets work....

A Critical Review of the Main Approaches on Financial Market Dynamics Modelling

Publié en ligne: 17 oct. 2016

Pages: 151 - 167

DOI: https://doi.org/10.1515/jheec-2015-0017

Mots clés
efficient markets hypothesis, behavioral finance theory, algorithm complexity theory, adaptive markets hypothesis, econophysics

© 2015 Lucian Pasca, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

A Critical Review of the Main Approaches on Financial Market Dynamics Modelling

Publié en ligne: 17 oct. 2016

Pages: 151 - 167

DOI: https://doi.org/10.1515/jheec-2015-0017

Mots clésefficient markets hypothesis, behavioral finance theory, algorithm complexity theory, adaptive markets hypothesis, econophysics

© 2015 Lucian Pasca, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
efficient markets hypothesis, behavioral finance theory, algorithm complexity theory, adaptive markets hypothesis, econophysics