Expectations, Technological Change, Information and the Theory of Financial Markets
نویسنده
چکیده
This paper concerns itself with understanding the operation of financial markets using realistic assumptions. The expectations of economic agents generate prices in the marketplace. The generation of the expectations derives from the information available in the marketplace and the perceived economic needs of the agents. The revision of expectations occurs as new information is constantly entering the marketplace through the process of technological change. In addition, the formulation of expectations has to derive from a realistic model of investor behavior such as utility satisficing. This paper argues that an understanding of the financial marketplace requires a synthesis of the study of economic change and the study of utility satisficing economic agents.
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