Scientific Definition
Asset prices fully reflect available information; you can't reliably beat the market.
Plain-English Definition
Asset prices fully reflect available information; you can't reliably beat the market.
Feynman Explanation
Mostly true. Spectacularly wrong at the exact moments it matters most.
Core Principle
Asset prices fully reflect available information; you can't reliably beat the market.
Mechanisms
Pending editorial review.
Asset prices fully reflect available information; you can't reliably beat the market.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Useful as a baseline; dangerous as a doctrine.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Mostly true. Spectacularly wrong at the exact moments it matters most.
Examples
- Behavioral finance documents pricing anomalies EMH cannot explain.
- Useful as a baseline; dangerous as a doctrine.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Believe EMH most of the time. Be skeptical at the extremes.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Believe EMH most of the time. Be skeptical at the extremes.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
The rate at which customers (or employees) leave over a period.
The gap between early adopters and the early majority kills most products.
Innovators → early adopters → early majority → late majority → laggards.
Low-end or new-market entrants overtake established incumbents.
Prices driven far above intrinsic value by feedback loops of belief and behavior.
Doing everything right by current customers can kill you.
Customers hire products to do a job in their life.
Aggregating many niche markets equals or exceeds the mainstream.
Beliefs about reality shape the reality.
Technologies grow slowly, then explode, then plateau.
When quality is hard to verify, bad products drive out good ones.
Markets fail to allocate resources efficiently on their own.