Endogenous factors drive market dynamics from "summary" of Why Stock Markets Crash by Didier Sornette
The driving forces behind market dynamics are shaped by internal factors. These endogenous elements originate from within the system itself, influencing the behavior of market participants and the overall market environment. These factors can include the beliefs, emotions, and decisions of investors, as well as the interactions and feedback loops between different market agents. Endogenous factors play a significant role in shaping market dynamics because they are intertwined with the very fabric of the market. These internal elements can create self-reinforcing feedback loops that amplify market movements, leading to the emergence of trends, bubbles, and crashes. The actions and reactions of market participants can create a domino effect that propels the market in a par...
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