Entropy-Based Behavioural Efficiency of the Financial Market

The most known and used abstract model of the financial market is based on the concept of the informational efficiency (EMH) of that market. The paper proposes an alternative which could be named the behavioural efficiency of the financial market, which is based on the behavioural entropy instead of...

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Autores principales:	Emil Dinga, Camelia Oprean-Stan, Cristina-Roxana Tănăsescu, Vasile Brătian, Gabriela-Mariana Ionescu
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	behaviour entropy efficiency implicit information financial market EMH Science Q Astrophysics QB460-466 Physics QC1-999
Acceso en línea:	https://doaj.org/article/1a07ae72907f4851a7fdd291660f6a1e
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spelling	oai:doaj.org-article:1a07ae72907f4851a7fdd291660f6a1e2021-11-25T17:29:17ZEntropy-Based Behavioural Efficiency of the Financial Market10.3390/e231113961099-4300https://doaj.org/article/1a07ae72907f4851a7fdd291660f6a1e2021-10-01T00:00:00Zhttps://www.mdpi.com/1099-4300/23/11/1396https://doaj.org/toc/1099-4300The most known and used abstract model of the financial market is based on the concept of the informational efficiency (EMH) of that market. The paper proposes an alternative which could be named the behavioural efficiency of the financial market, which is based on the behavioural entropy instead of the informational entropy. More specifically, the paper supports the idea that, in the financial market, the only measure (if any) of the entropy is the available behaviours indicated by the implicit information. Therefore, the behavioural entropy is linked to the concept of behavioural efficiency. The paper argues that, in fact, in the financial markets, there is not a (real) informational efficiency, but there exists a behavioural efficiency instead. The proposal is based both on a new typology of information in the financial market (which provides the concept of implicit information—that is, that information ”translated” by the economic agents from observing the actual behaviours) and on a non-linear (more exactly, a logistic) curve linking the behavioural entropy to the behavioural efficiency of the financial markets. Finally, the paper proposes a synergic overcoming of both EMH and AMH based on the new concept of behavioural entropy in the financial market.Emil DingaCamelia Oprean-StanCristina-Roxana TănăsescuVasile BrătianGabriela-Mariana IonescuMDPI AGarticlebehaviourentropyefficiencyimplicit informationfinancial marketEMHScienceQAstrophysicsQB460-466PhysicsQC1-999ENEntropy, Vol 23, Iss 1396, p 1396 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	behaviour entropy efficiency implicit information financial market EMH Science Q Astrophysics QB460-466 Physics QC1-999
spellingShingle	behaviour entropy efficiency implicit information financial market EMH Science Q Astrophysics QB460-466 Physics QC1-999 Emil Dinga Camelia Oprean-Stan Cristina-Roxana Tănăsescu Vasile Brătian Gabriela-Mariana Ionescu Entropy-Based Behavioural Efficiency of the Financial Market
description	The most known and used abstract model of the financial market is based on the concept of the informational efficiency (EMH) of that market. The paper proposes an alternative which could be named the behavioural efficiency of the financial market, which is based on the behavioural entropy instead of the informational entropy. More specifically, the paper supports the idea that, in the financial market, the only measure (if any) of the entropy is the available behaviours indicated by the implicit information. Therefore, the behavioural entropy is linked to the concept of behavioural efficiency. The paper argues that, in fact, in the financial markets, there is not a (real) informational efficiency, but there exists a behavioural efficiency instead. The proposal is based both on a new typology of information in the financial market (which provides the concept of implicit information—that is, that information ”translated” by the economic agents from observing the actual behaviours) and on a non-linear (more exactly, a logistic) curve linking the behavioural entropy to the behavioural efficiency of the financial markets. Finally, the paper proposes a synergic overcoming of both EMH and AMH based on the new concept of behavioural entropy in the financial market.
format	article
author	Emil Dinga Camelia Oprean-Stan Cristina-Roxana Tănăsescu Vasile Brătian Gabriela-Mariana Ionescu
author_facet	Emil Dinga Camelia Oprean-Stan Cristina-Roxana Tănăsescu Vasile Brătian Gabriela-Mariana Ionescu
author_sort	Emil Dinga
title	Entropy-Based Behavioural Efficiency of the Financial Market
title_short	Entropy-Based Behavioural Efficiency of the Financial Market
title_full	Entropy-Based Behavioural Efficiency of the Financial Market
title_fullStr	Entropy-Based Behavioural Efficiency of the Financial Market
title_full_unstemmed	Entropy-Based Behavioural Efficiency of the Financial Market
title_sort	entropy-based behavioural efficiency of the financial market
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/1a07ae72907f4851a7fdd291660f6a1e
work_keys_str_mv	AT emildinga entropybasedbehaviouralefficiencyofthefinancialmarket AT cameliaopreanstan entropybasedbehaviouralefficiencyofthefinancialmarket AT cristinaroxanatanasescu entropybasedbehaviouralefficiencyofthefinancialmarket AT vasilebratian entropybasedbehaviouralefficiencyofthefinancialmarket AT gabrielamarianaionescu entropybasedbehaviouralefficiencyofthefinancialmarket
_version_	1718412271631204352

Entropy-Based Behavioural Efficiency of the Financial Market

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