Mr. Market’s Mind: Finance’s Hard Problem
Draft (2013). Cite published version as: Patrick Schotanus. 2014. “Mr. Market's Mind: Finance's Hard Problem”, Journal of Behavioral Finance, 15:2, 109-119, DOI: 10.1080/15427560.2014.908883.
38 Pages Posted: 24 Jan 2020
Date Written: January 20, 2013
The market as a mind is the implicit premise in any discussion on whether the market is rational or not. Still, its implications, in terms of ontology and epistemology, are hardly understood. In particular, this paper defines the market’s version of the mind-body problem and labels it as finance’s “hard” problem. Its denial by modern finance causes this dominant paradigm to fail in dealing with reality in general and to produce incomplete investment knowledge in particular. Finally, as part of facing up to this problem, this paper offers a glimpse at a practical approach which may enrich investment research.
Keywords: Market’s mind; Price discovery; Consciousness; Investment intuition; Uncertainty
JEL Classification: G01, G02, G1
Suggested Citation: Suggested Citation