The Adaptive Markets Hypothesis (AMH) presents a formal and systematic exposition of a new narrative about financial markets that reconciles rational investor behavior with periods of temporary financial insanity. In this narrative, intelligent but fallible investors learn from and adapt to randomly shifting environments. Financial markets may not always be efficient, but they are highly competitive, innovative, and adaptive, varying in their degree of efficiency as investor populations and the financial landscape change over time. Andrew Lo and Ruixun Zhang develop the mathematical foundations of the AMH--a simple yet surprisingly powerful set of evolutionary models of behavior--and then apply these foundations to show how the most fundamental economic behaviors that we take for granted can arise solely through natural selection. Drawing on recent advances in cognitive neuroscience and artificial intelligence, the book also explores how our brain affects economic and financial decision-making. This volume is a must-listen for anyone who has ever been puzzled and concerned by the behavior of financial markets and the implications for their personal wealth, and seeks to learn how best to respond to such behavior.
Author Biography:
Ruixun Zhang is an assistant professor and Boya Young Fellow in the School of Mathematical Sciences at Peking University (PKU). He is also affiliated with the PKU Laboratory for Mathematical Economics and Quantitative Finance, the PKU Center for Statistical Science, and the PKU National Engineering Laboratory for Big Data Analysis and Applications. Prior to joining PKU, he worked at several places, including Google and Goldman Sachs. Zhang received a PhD in applied mathematics from MIT in 2015, and BS in mathematics and applied mathematics and BA in economics from Peking University in 2011. His research interests include evolutionary models of financial behavior, sustainable investing, FinTech, and applications of machine learning. Andrew W. Lo is the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management, director of the MIT Laboratory for Financial Engineering, a principal investigator at the MIT Computer Science and Artificial Intelligence Laboratory, and an affiliated faculty member of the MIT Department of Electrical Engineering and Computer Science. He is also an external faculty member of the Santa Fe Institute and a research associate of the National Bureau of Economic Research. Lo received a BA in economics from Yale University in 1980 and an AM and PhD in economics from Harvard University in 1984. Mike Lenz has been an audiobook narrator and voice actor for more than fourteen years. Having narrated titles in genres ranging from fiction, entertainment, science, and children's literature to Christian, business, self-help, and history, Mike loves bringing nonfiction and fiction stories to life with his engaging, confident, and trustworthy voice. Mike's broad background includes voicing commercials, eLearning projects, real estate videos, corporate and web-based videos, and brand imaging, appearing in regional and national television commercials as an on-camera talent, and serving as the mayor of his hometown of Saratoga Springs, New York. Mike is also a Voice Arts Award-nominated podcast producer as well as an author. He is a frequent speaker at learning and voice-over conferences. Mike currently lives in Saratoga Springs, New York, with his wife and four children.
