risk factors are said to represent some aspect or dimension of undiversifiable systematic risk which should be compensated with higher expected returns. 2, there are three variants of the hypothesis: "weak "semi-strong and "strong" form. For events which take place further in time (e.g. " Economic theory and the crisis." Voxeu. Lauto, Giancarlo; Valentin, Finn (2016). The goalie on a soccer team may bet against his team and purposely throw the game. "Better Wisdom from Crowds." MIT News. An anonymous centralized arbiter is untrustworthy. "Has 'guiding model' for global markets gone haywire?".
Prediction market - Wikipedia Economic Research - Federal Reserve Bank of San Francisco Shy of the Character Limit: "Twitter Mood Predicts the
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Member, ieee; and Wunsch, II, Donald. They found that predictions are very good when the event predicted is close in time. David Dreman has criticized the evidence provided by this instant "efficient" response, pointing out that an immediate response is not necessarily efficient, and that the long-term performance of the stock in response to certain movements are better indications. Excess returns cannot be earned in the long run by using investment strategies based on historical share prices or other historical data. 58 Market strategist Jeremy Grantham stated flatly that the EMH was responsible for the current financial crisis, crusades thesis claiming that belief in the hypothesis caused financial leaders to have a "chronic underestimation of the dangers of asset bubbles breaking". The European Journal of the History of Economic Thought. "International Stock Market Efficiency and Integration: A Study of Eighteen Nations".
For competitive markets to reach exchange efficiency, each individual is supposed to always face the same price. Efficient market theory, in conjunction with " fraud-on-the-market theory has been used in Securities Class Action Litigation to both justify and as mechanism for the calculation of damages. This bias comes the traders' "time preferences" (their preferences not to lock their funds for a long time in assets). Paul Samuelson had begun to circulate Bachelier's work among economists.