Is the Adapted Markets Hypothesis a Good Idea?

The idea behind adaptive markets is to take the principles of evolutionary biology and apply them to financial market interactions. It's basically an approach that takes as starting point the efficient markets hypothesis, but then layrs on top of it a more discreet and specific description of investra behavior from the behavio, psychological and ultimately evolutionary biology perspective. To be able to understand the dynamic of when markets are efficient and when they break down, you need to develop a different approach.

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