Psychology of Economic Decision-Making
The Adaptive Markets Hypothesis (AMH) is a theory that integrates concepts from behavioral finance and evolutionary biology to explain how financial markets operate. It suggests that market efficiency is not static but rather evolves based on the changing behaviors of investors and the environment in which they operate. This hypothesis acknowledges that psychological factors, social dynamics, and external conditions can lead to market anomalies and influence asset pricing models over time.
congrats on reading the definition of Adaptive Markets Hypothesis. now let's actually learn it.