Evolutionary Finance

The purpose of this book is to introduce the field of bioinformatics to financial modelling. It focuses on the way information informs price, and constructs a framework to explain information generation and the agglomeration process, enabling the reader to make more effective financial decisions. Based on all aspects of applied finance, this book uses informational analysis to help the reader understand the similarities between biomathematics and financial mathematics.

Practitioner Dowling focuses on understanding market efficiency in the sense of how information is imparted into price, working from the ground up using bioinfomatics as a guide. Dowling describes the traditional view of finance in the efficient markets hypothesis (EMH), examines cost, ability and speed, and asks if empirical studies of EMH shed any light on markets and information. He goes on to describe the new views of finance, with challenges such as determinism, complexity theory and the nonlinear dynamics school, bounded rationality, heterogeneous agents and the behavior finance school, trading rules, evolutionary games and artificial markets. He explains the mechanics of modeling information as an evolutionary process, puts it all together in an evolutionary model of the marketplace, explores the implications for distributed form and evolutionary finance as an applied perspectives, and takes a chance at predicting the future for evolutionary finance. Annotation ©2006 Book News, Inc., Portland, OR