Adaptive Markets: Financial Evolution at the Speed of Thought

  • 20h 21m 45s
  • Andrew W. Lo
  • Recorded Books, Inc.
  • 2018

Half of all Americans have money in the stock market, yet economists can't agree on whether investors and markets are rational and efficient, as modern financial theory assumes, or irrational and inefficient, as behavioral economists believe—and as financial bubbles, crashes, and crises suggest. This is one of the biggest debates in economics, and the value or futility of investment management and financial regulation hang on the outcome. In this groundbreaking book, Andrew W. Lo cuts through this debate with a new framework, the Adaptive Markets Hypothesis, in which rationality and irrationality coexist.

Drawing on psychology, evolutionary biology, neuroscience, artificial intelligence, and other fields, Adaptive Markets shows that the theory of market efficiency isn't wrong but merely incomplete. When markets are unstable, investors react instinctively, creating inefficiencies for others to exploit. Lo's new paradigm explains how financial evolution shapes behavior and markets at the speed of thought—a fact revealed by swings between stability and crisis, profit and loss, and innovation and regulation.

In this Audiobook

  • Introducton
  • Chapter 1. Are We All Homo economicus Now?
  • Chapter 2. If You're So Smart, Why Aren't You Rich?
  • Chapter 3. If You're So Rich, Why Aren't You Smart?
  • Chapter 4. The Power of Narrative
  • Chapter 5. The Evolution Revolution
  • Chapter 6. The Adaptive Markets Hypothesis
  • Chapter 7. The Galapagos Islands of Finance
  • Chapter 8. Adaptive Markets in Action
  • Chapter 9. Fear, Greed, and Financial Crisis
  • Chapter 10. Finance Behaving Badly
  • Chapter 11. Fixing Finance
  • Chapter 12. To Boldly Go Where No Financier Has Gone Before