Efficient Markets, Value Neutrality and Symmetric Maximum Entropy Principle

Yinghao Luo ()

MPRA Paper from University Library of Munich, Germany

Abstract: We study the relationship between efficient markets, value neutrality and symmetric maximum entropy principle. We find that the efficient market is in the state of maximum information entropy, which means that market prices fluctuate randomly, that value neutrality is in the state of maximum value entropy, and that information symmetry can lead markets to reach efficient outcomes, while the symmetry of resource allocation is bound to lead to value neutrality, both of which mean they are in a symmetric maximum entropy state.

Keywords: efficient markets; value neutrality; maximum entropy，information symmetry，symmetry of resource allocation (search for similar items in EconPapers)
JEL-codes: D2 D3 D8 E4 F3 G1 (search for similar items in EconPapers)
Date: 2024-05-21
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:121052

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