ILAR Sign up for PNAS Online eTocs
Link: Info for AuthorsLink: Editorial BoardLink: AboutLink: SubscribeLink: AdvertiseLink: ContactLink: Sitemap Link: PNAS Home
Proceedings of the National Academy of Sciences
Link: Current Issue "" Link: Archives "" Link: Online Submission ""  Link: Advanced Search



This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a colleague
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Similar articles in PubMed
Right arrow Alert me to new issues of the journal
Right arrow Add to My File Cabinet
Right arrow Download to citation manager
Right arrow Request Copyright Permission
Citing Articles
Right arrow Citing Articles via CrossRef
Right arrow Citing Articles via ISI Web of Science (18)
Right arrow Citing Articles via Google Scholar
Google Scholar
Right arrow Articles by Farmer, J. D.
Right arrow Articles by Lo, A. W.
Right arrow Search for Related Content
PubMed
Right arrow PubMed Citation
Right arrow Articles by Farmer, J. D.
Right arrow Articles by Lo, A. W.
Social Bookmarking
Add to CiteULike   Add to Complore   Add to Connotea   Add to Del.icio.us   Add to Digg  
What's this?

 Previous Article  | Table of Contents |  Next Article 

Vol. 96, Issue 18, 9991-9992, August 31, 1999

This paper is a summary of a session presented at the tenth annual symposium on Frontiers of Science, held November 19-21, 1998, at the Arnold and Mabel Beckman Center of the National Academies of Sciences and Engineering in Irvine, CA.

From the Academy
 Frontiers of finance: Evolution and efficient markets

J. Doyne Farmer*,dagger and Andrew W. LoDagger

* Prediction Company, 236 Montezuma Avenue, Santa Fe, NM 87501; and Dagger  Massachusetts Institute of Technology Sloan School of Management, 50 Memorial Drive, E52-432, Cambridge, MA 02142-1347

In this review article, we explore several recent advances in the quantitative modeling of financial markets. We begin with the Efficient Markets Hypothesis and describe how this controversial idea has stimulated a number of new directions of research, some focusing on more elaborate mathematical models that are capable of rationalizing the empirical facts, others taking a completely different tack in rejecting rationality altogether. One of the most promising directions is to view financial markets from a biological perspective and, specifically, within an evolutionary framework in which markets, instruments, institutions, and investors interact and evolve dynamically according to the "law" of economic selection. Under this view, financial agents compete and adapt, but they do not necessarily do so in an optimal fashion. Evolutionary and ecological models of financial markets is truly a new frontier whose exploration has just begun.

dagger    To whom reprint requests should be addressed. E-mail: jdf{at}santafe.edu.

Copyright © 1999 by The National Academy of Sciences  0027-8424/99/969991-2$2.00/0
Add to CiteULike CiteULike   Add to Complore Complore   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us   Add to Digg Digg    What's this?