[ExI] Greed + Incompetence + A Belief in Market Efficiency = Disaster
stefano.vaj at gmail.com
Thu Jan 29 18:10:25 UTC 2009
On Thu, Jan 29, 2009 at 6:34 PM, Damien Broderick <thespike at satx.rr.com> wrote:
> Isn't the idea not that markets are perfect but that they work better, more
> often, than other available methods such as top-down regulation?
Markets are certainly not "perfect" even from a theoretical point of
view, e.g., in the sense that they fluctuate, they are exposed to
statistical drifts, they are "granular" rather than "continuous", etc.
But as for other non-falsifiable theories, after a fashion they are
always "efficient" by definition in pure market terms, as their
behaviour can always be decribed (after the fact, of course) as
representing the unavoidable market response to a given scenario.
What you say is that irrespective of such mythology markets may well
be considered as, e.g., a useful computing and management tool for
empirical purposes in certain scenarios. I think this is probably
true, but this should be assessed on case-by-case basis IMHO.
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