Table 1 Alternatives to the EMH... | Emerald Publishing

Table 1

Alternatives to the EMH

Hypothesis	Implication
Noise Trader Approach	It highlights the importance of understanding investor sentiment, cognitive biases and emotional reactions in financial markets
Coherent Market Hypothesis	The need to understand and model nonlinear dynamics in finance
Fractal Market Hypothesis	The need to understand that investors are not homogeneous but are heterogeneous depending on their investing horizon
Heterogenous Market Hypothesis	The HMH suggests that diversity in market participants' preferences, beliefs and behaviours plays a significant role in shaping financial markets. This diversity has implications for market dynamics, price discovery, risk and return, investor behaviour and regulatory considerations
Adaptive Market Hypothesis	The need to understand that market efficiency is not static but is dynamic depending on the interaction and competition among different stakeholders at any given time
Discovering Market Hypothesis	The hypothesis emphasises the role of narratives in asset price formation
Novelty-Narrative Hypothesis	The need to comprehend the role of information in an environment that has been exposed to a novel event
Intersubjectivity Market Hypothesis	The need to use a multidisciplinary approach to empirical finance, particularly the application of methods from econophysics

Hypothesis	Implication
Noise Trader Approach	It highlights the importance of understanding investor sentiment, cognitive biases and emotional reactions in financial markets
Coherent Market Hypothesis	The need to understand and model nonlinear dynamics in finance
Fractal Market Hypothesis	The need to understand that investors are not homogeneous but are heterogeneous depending on their investing horizon
Heterogenous Market Hypothesis	The HMH suggests that diversity in market participants' preferences, beliefs and behaviours plays a significant role in shaping financial markets. This diversity has implications for market dynamics, price discovery, risk and return, investor behaviour and regulatory considerations
Adaptive Market Hypothesis	The need to understand that market efficiency is not static but is dynamic depending on the interaction and competition among different stakeholders at any given time
Discovering Market Hypothesis	The hypothesis emphasises the role of narratives in asset price formation
Novelty-Narrative Hypothesis	The need to comprehend the role of information in an environment that has been exposed to a novel event
Intersubjectivity Market Hypothesis	The need to use a multidisciplinary approach to empirical finance, particularly the application of methods from econophysics

Source(s): Table created by authors