Paper: SSRN 349660

Abstract

The efficient markets theory reached the height of its dominance in academic circles around the 1970s. Faith in this theory was eroded by a succession of discov

Complexity vs Empirical Score

  • Math Complexity: 6.5/10
  • Empirical Rigor: 4.0/10
  • Quadrant: Lab Rats — theoretically deep, empirically untested

Why this score: The paper presents formal econometric models and variance tests (e.g., present value equations, vector autoregressions) indicating advanced math, but relies on historical data analysis and theoretical critique without detailed backtest specifications, datasets, or implementation code.

Research Flowchart

  flowchart TD
  A["Research Goal: <br/>Explain Market Anomalies"] --> B["Methodology: <br/>Comparative Analysis"]
  B --> C["Data: <br/>Equities & Historical Prices"]
  C --> D["Computational Process: <br/>Test EMH vs. Behavioral Models"]
  D --> E["Key Findings: <br/>Behavioral Factors Drive Bubbles"]
  D --> F["Key Findings: <br/>Markets are not Fully Efficient"]