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It's not quite behavioural finance but marginal benefits and marginal costs as applied to market efficiency. From the author of the EMH in 1991, 21 years after
by meric 14y ago
It's not quite behavioural finance but marginal benefits and marginal costs as applied to market efficiency.
From the author of the EMH in 1991, 21 years after proposing the EMH.
"A weaker and economically more sensible version of the efficiency hypothesis says that prices reflect information to the point where the marginal benefits of acting on information (the profits to be made) do not exceed the marginal costs (Jensen (1978))."
http://efinance.org.cn/cn/fm/Efficient%20markets%20II.pdf http://efinance.org.cn/cn/fm/Efficient%20markets%20II.pdf
- confluence 14y agoSo basically what you are saying to me is that 1=1 if and only if rational investors have more capital than irrational ones. That's useful isn't it...