Neurofinance versus the efficient markets hypothesis

Kavous Ardalan

Global Finance Journal, 2018, vol. 35, issue C, 170-176

Abstract: This paper develops the implication of neurofinance with respect to the efficient markets hypothesis. Neurofinance informs us that thinking imposes strain on the mind, in the sense that thinking is a comparatively laborious, biologically costly, and neurologically expensive cognitive process. The paper shows that people balance the costs and benefits of thinking and demonstrates mathematically that such balancing makes financial markets inefficient.

Keywords: Neurofinance; Behavioral finance; Costly thinking; Efficient markets hypothesis (search for similar items in EconPapers)
JEL-codes: G40 G41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:35:y:2018:i:c:p:170-176

DOI: 10.1016/j.gfj.2017.10.005

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