Learning and adaptation's impact on market efficiency

A dynamic model with learning and adaptation captures the evolution in trader beliefs and trading strategies. Through a process of learning and observation, traders improve their understanding of the market. Traders also engage in a process of adaptation by switching between trading strategies based on past performance. The asymptotic properties are derived analytically, demonstrating that convergence to efficiency depends on the model of adaptation.

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Year of publication:	2010
Authors:	Goldbaum, David ; Panchenko, Valentyn
Published in:	Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 76.2010, 3, p. 635-653
Publisher:	Elsevier
Subject:	Market efficiency Learning Dynamic systems

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008860893