[ExI] Greed + Incompetence + A Belief in Market Efficiency = Disaster
pharos at gmail.com
Thu Jan 29 17:38:49 UTC 2009
On Thu, Jan 29, 2009 at 5:06 PM, Stefano Vaj wrote:
> The prob is that within classic economic theory the market player
> cannot really be "incompetent" as a whole, since they are the ultimate
> judges of where their preference lie at any given moment, and since
> their "efficience" is supposedly assured by the market mechanisms
> So, I suppose that such article is not going to change much in the
> views of those adhering to such theory.
He is pointing out (loudly!) that humans acting as market players are
just as irrational as humans in daily life. Bubbles - irrational
exuberance, crashes - irrational fears, panic buying, crooked deals,
greed, beggar take the hindmost, etc. etc. All human life is there in
Markets need civilizing and laws, just like property and human behaviour.
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