Market participants exhibit heterogeneous beliefs from "summary" of Why Stock Markets Crash by Didier Sornette
The notion that market participants exhibit heterogeneous beliefs lies at the heart of understanding the dynamics of financial markets. This means that different investors hold different opinions about the future prospects of an asset, leading to a diversity of views and expectations. These beliefs can be influenced by a multitude of factors, such as past experiences, personal biases, and access to information. When market participants hold divergent beliefs, it creates a situation where the market is in a state of uncertainty and ambiguity. This can lead to price fluctuations as investors buy and sell assets based on their individual outlooks. The clash of opinions can result in intense debates, volatility, and ultimately...
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