The Market Organism : Long Run Survival in Markets with Heterogeneous Traders

@inproceedings{Blume2006TheMO,
  title={The Market Organism : Long Run Survival in Markets with Heterogeneous Traders},
  author={Lawrence E. Blume and David Easley},
  year={2006}
}
The information content of prices is a central problem in the general equilibrium analysis of competitive markets. Rational expectations equilibrium identifies conditioning simultaneously on contemporaneous prices and private information as the mechanism by which information enters prices. Here we look to the ecology of markets for an explanation of the information content of prices. Markets could select across traders with different beliefs, or, reminiscent of ‘the wisdom of crowds’, markets… CONTINUE READING