On Wed, Jul 24, 2019 at 6:01 PM Jose Mario Quintana <jose.mario.quint...@gmail.com> wrote: > At least since 1980 the academia recognized the obvious: if the markets are > efficient there is no incentive for traders to be active; thus, relevant > information is not assimilated by the markets and should become inefficient > (conversely, if the markets are inefficient there is incentive for traders > to be active; thus, relevant information is assimilated by the markets and > should become efficient). > > This is known as the Grossman-Stiglitz paradox.
How fortunate it is, then, that markets are not efficient? The expression of this which I am fond of is https://arxiv.org/pdf/1002.2284.pdf -- roughly paraphrased: markets can be efficient on small problems, but there's exponential growth in complexity over time, which quickly defeats any such advantages. Thanks, -- Raul ---------------------------------------------------------------------- For information about J forums see http://www.jsoftware.com/forums.htm
