abstract:The adaptive market hypothesis, as proposed by Andrew Lo,Lo, 2004. is an attempt to reconcile economic theories based on the efficient market hypothesis (which implies that markets are efficient) with behavioral economics, by applying the principles of evolution to financial interactions: competition, adaptation and natural selection.
ProfessorAndrewLoof MIT has developed theadaptivemarkethypothesis, attempting tointroduce theprinciplesofevolution – competition, adaptationandnaturalselection – to his financialmodels.