Studies in Economic Theory

Evolutionary Foundations of Equilibria in Irrational Markets

Authors: Luo, Guo Ying

  • First comprehensive text on equilibrium outcomes through economic natural selection in irrational markets
  • Covers several new evolutionary models of future markets, commodities, and one-sided auctions
  • First book to survey equilibrium outcomes at an aggregate level
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eBook $129.00
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  • ISBN 978-1-4614-0712-6
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  • Immediate eBook download after purchase
Hardcover $169.00
price for USA
  • ISBN 978-1-4614-0711-9
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
Softcover $169.00
price for USA
  • ISBN 978-1-4899-8593-4
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
About this book

One of the core building blocks of traditional economic theory is the concept of equilibrium, a state of the world in which economic forces are balanced and in the absence of external influences the values of economic variables remain static.  Many traditional equilibrium models, or equilibria, are established based on the rational behavior of individuals within financial markets, such as traders, market analysts, and investing firms, and their ability to maximize profits, no matter the cost.  Yet what happens when these market participants behave in an irrational manner, and how does this impact economic equilibria?  Contemporary economists have agreed that a process similar to Darwin’s Theory of Natural Selection takes over, whereby equilibria are shaped not by the behavior of individual participants but by an environment outside its control (i.e., an environment with little concern for maximizing profits).  It is an environment in which those “selected” produce positive financial gains, but have no regard for how it was obtained or underlying motivations—and those participants suffering losses disappear altogether. 

Evolutionary Foundations of Equilibria in Irrational Markets proves traditional economic equilibria continue to occur despite natural selection in irrational markets.  It covers a wide sampling of equilibria under various scenarios, and each chapter addresses the results of these models at an aggregate level.  The text is supplemented with charts and figures to drive home key findings and proofs, making it of interest to students and researchers in the areas of economics and behavioral finance.

Reviews

From the reviews:

“This is a very interesting book, to mathematical economists and applied probabilists … . Furthermore, since this is an area that is still open to further developments, this book may be an excellent starting point for further research. The book is well written, and balances the material extremely well, so that it can be read by a wide audience. The references also help the reader who wishes to get into more detail on the wide (not mathematical) literature on the subject.” (Athanasios Yannacopoulos, Mathematical Reviews, January, 2013)


Table of contents (8 chapters)

  • Introduction

    Luo, Guo Ying

    Pages 1-4

  • Evolution, Irrationality, and Perfectly Competitive Equilibrium

    Luo, Guo Ying

    Pages 5-31

  • Evolution, Irrationality, and Monopolistically Competitive Equilibrium

    Luo, Guo Ying

    Pages 33-59

  • Evolution and Informationally Efficient Equilibrium in a Commodity Futures Market

    Luo, Guo Ying

    Pages 61-88

  • Natural Selection, Random Shocks, and Market Efficiency in a Futures Market

    Luo, Guo Ying

    Pages 89-112

Buy this book

eBook $129.00
price for USA (gross)
  • ISBN 978-1-4614-0712-6
  • Digitally watermarked, DRM-free
  • Included format: PDF, EPUB
  • ebooks can be used on all reading devices
  • Immediate eBook download after purchase
Hardcover $169.00
price for USA
  • ISBN 978-1-4614-0711-9
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
Softcover $169.00
price for USA
  • ISBN 978-1-4899-8593-4
  • Free shipping for individuals worldwide
  • Usually dispatched within 3 to 5 business days.
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Bibliographic Information

Bibliographic Information
Book Title
Evolutionary Foundations of Equilibria in Irrational Markets
Authors
Series Title
Studies in Economic Theory
Series Volume
28
Copyright
2012
Publisher
Springer-Verlag New York
Copyright Holder
Springer Science+Business Media, LLC
eBook ISBN
978-1-4614-0712-6
DOI
10.1007/978-1-4614-0712-6
Hardcover ISBN
978-1-4614-0711-9
Softcover ISBN
978-1-4899-8593-4
Series ISSN
1431-8849
Edition Number
1
Number of Pages
XII, 200
Topics