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In Fama's influential 1970 review paper, he categorized empirical tests of efficiency into "weak-form", "semi-strong-form", and "strong-form" tests. [2] These categories of tests refer to the information set used in the statement "prices reflect all available information." Weak-form tests study the information contained in historical prices.
The joint hypothesis problem is the problem that testing for market efficiency is difficult, or even impossible. Any attempts to test for market (in)efficiency must involve asset pricing models so that there are expected returns to compare to real returns. It is not possible to measure 'abnormal' returns without expected returns predicted by ...
Fama identified three levels of market efficiency: 1. Weak-form efficiency. Prices of the securities instantly and fully reflect all information of the past prices. This means future price movements cannot be predicted by using past prices, i.e past data on stock prices is of no use in predicting future stock price changes. 2. Semi-strong ...
A market can be said to have allocative efficiency if the price of a product that the market is supplying is equal to the marginal value consumers place on it, and equals marginal cost. In other words, when every good or service is produced up to the point where one more unit provides a marginal benefit to consumers less than the marginal cost ...
First coined in a paper presented at the ACEEE Summer Study in 1992, [5] the term "market transformation" is underpinned by the classic microeconomic model of markets.The concept describes a downward-sloping demand curve and an upward-sloping, presumably short-run supply curve. [6]
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The market structure determines the price formation method of the market. Suppliers and Demanders (sellers and buyers) will aim to find a price that both parties can accept creating a equilibrium quantity. Market definition is an important issue for regulators facing changes in market structure, which needs to be determined. [1]
On its blog, Craigslist dismisses Blumenthal's move as a publicity stunt, and emphasizes that "craigslist has gone beyond fulfilling its legal obligations, far beyond classifieds industry norms ...