Informational efficiency

Informational efficiency

The degree to which market prices correctly and quickly reflect information and thus the true value of an underlying asset.

Market Efficiency

The extent to which the price of an asset reflects all information available. Economists disagree on how efficient markets are. Followers of the efficient markets theory hold that the market efficiently deals with all information on a given security and reflects it in the price immediately, and that technical analysis, fundamental analysis, and/or any speculative investing based on those methods are useless. On the other hand, the primary observation of behavioral economics holds that investors (and people in general) make decisions on imprecise impressions and beliefs, rather than rational analysis, rendering markets somewhat inefficient to the extent that they are affected by people.
References in periodicals archive ?
We also show that the improvement in liquidity is mainly driven by a reduction in adverse selection; that informational efficiency is not significantly affected; and there is an increase in retail trading.
This result contradicts the belief of the SEC and others that naked shorting is not information-based and does not contribute to stock market informational efficiency.
In this study, the entropy measurement, an econophysic approach, was applied to quantify the informational efficiency of timber real estate investment trusts (REITs), wood, furniture, and paper markets in the United States during the period from 1999 to 2012.
He contributes to the sizable literature on informational efficiency in sport betting markets by analyzing a large data set betting on football matches in Europe.
Competition between NSE and BSE and the free entry and exit for the economic agents who trade on these exchanges have improved the operational as well as informational efficiency of the stock markets.
Manne argues first that insiders trading on nonpublic material information contribute to improving the informational efficiency of stock prices.
A stronger version of the time-invariance is involved, if the markets display different degrees of informational efficiency and the prices' evolution itself is close to a pure random walk process (eventually with drift).
The second volume contains papers that explore how the promotion-and-relegation (based on sporting performance) league structure of European football, which contrasts with the fixed- hierarchy structure of most North American sports leagues, influences economic competitive balance between leagues; examine industrial performance as a function of the relationship between wage costs and team performance and the relationship between team performance and team revenue; and discuss betting and the informational efficiency of markets.
BIO "is the first interactive business intelligence solution to enable organizations to achieve informational efficiency for about 25 to 30 percent of the cost of competing applications," claims NexVue founder Dan Schwartz.
In particular, we know little about how institutions affect the informational efficiency of share prices, one important dimension of market quality.
On the whole, these studies report a very high degree of informational efficiency.
Guernsey & Company, has shown a decline in informational efficiency since the collapse of Enron and the closing of the EnronOnline Internet-based trading platform.
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