1. Are Financial Markets Efficient?

Author: Shleifer, Andrei

Source: Inefficient Markets, March 2000 , pp. 1-28(28)

Publisher: Oxford Scholarship Online Monographs

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Abstract:

Assesses the idea of efficient financial markets. It evaluates the theoretical and empirical foundations of the efficient markets hypothesis, emphasising the cracks that have emerged in them. Special attention is given to the rationality of investors, the randomness of the trades, and the role of arbitrageurs. Then the author suggests that an alternative theory—behavioural finance—could be more successful in explaining the evidence. The chapter concludes with a brief outline of the structure of the book.

Keywords: financial market; financial trade; efficient markets hypothesis; arbitrage; finance; behavioural finance; rationality

Document Type: Research article

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