Markets are efficient if and only if P = NP

A 2010 entry by the same author: Markets are efficient if and only if P = NP https://arxiv.org/abs/1002.2284 :)

silentmafiaJul 3, 2026View on HNParent context

> No. Where do you get that misinformation? > Yes, it's relatively easy to construct a model where perfect information and a bunch of other assumption lead to markets being great. But that merely shows that these conditions are sufficient. Not that they are necessary. "Markets…

ben_wOct 25, 2024View on HNParent context

Thanks for the considered response. > "Markets are efficient if and only if P = NP": https://arxiv.org/abs/1002.2284 That's a very cute result, but requires a very specific definition of 'efficient market'. There's actually a range of 'efficient market' definitions, each with…

eruOct 26, 2024View on HNParent context

If markets were perfectly efficient there would be no entrepreneurs. To start a business of any kind is to hypothesize the existence of a market inefficiency, something the market is not currently doing that would make it more efficient. All business is in some sense arbitrage…

apiSep 3, 2024View on HNParent context

The Efficient-market Hypothesis has been proven to be true only if P=NP. https://arxiv.org/abs/1002.2284 What's your bet on the latter? I'm... skeptical.

samatmanJun 24, 2024View on HNParent context

> one where you can comfortably afford living, fun, saving, etc I think is most people's interpretations My understanding is that most people's understanding of "middle class" is "about 20% richer than me", and that this remains true regardless of how rich one is. Most people…

ben_wApr 1, 2024View on HNParent context

> The stock market provides an efficient medium for the allocation of capital. Only if P=NP.[1] Besides Efficiency: the ratio of the useful work performed by a machine or in a process to the total energy expended or heat taken in. This also begs the question: "To efficiently…

j-pbAug 28, 2023View on HNParent context

Ahahahahaha sure, if P=NP https://arxiv.org/abs/1002.2284

eli_gottliebMay 8, 2023View on HNParent context

Weak form efficiency - https://arxiv.org/abs/1002.2284 is one such proof. For strong form efficiency (which requires markets perfectly reflect all available information) - You would have trouble finding people who still believe in strong form efficiency. The weak form paper…

DannyBeeMar 15, 2022View on HNParent context

I think that's a pretty valid question to ask, but one that doesn't sit right with the typical neo-liberal/venture-capital clientele on HN. The wishful image of financial autonomy and chances of personal and business development through a public market seems to provide too much…

j-pbOct 1, 2021View on HNParent context

I never said that central planning must work better or worse, just that Hayek's reasoning doesn't hold up because it starts from the ridiculous assumption that markets always find the equilibrium, always propagate local knowledge, etc.., and those are the reason why they…

sudosysgenJul 6, 2021View on HNParent context

I don't know if you are a Computing Scientist, but you might find this parallel interesting: "Markets are efficient if and only if P = NP" https://arxiv.org/abs/1002.2284

sovaApr 24, 2021View on HNParent context

Here is the article : https://arxiv.org/pdf/1002.2284.pdf I misremembered, it's not just the strong form that is refuted, but the weak form as well!

sudosysgenFeb 15, 2021View on HNParent context

Only with perfect information, and even then markets are NP-complete. https://arxiv.org/pdf/1002.2284.pdf

ben_wSep 26, 2020View on HNParent context

Research paper: Markets are efficient if and only if P=NP https://arxiv.org/abs/1002.2284

FordecSep 4, 2020View on HNParent context

the efficient market hypotheis isn't dead, but markets are efficient only if P == NP https://arxiv.org/abs/1002.2284

gonzoJun 1, 2020View on HNParent context

Ah, you're one of those fools. When you're finished with history, try complexity theory [0]. [0] https://arxiv.org/abs/1002.2284

lidHanteykFeb 21, 2020View on HNParent context

Well, a naive, overly strong formulation of the efficient markets hypothesis may imply that P=NP. Something like "an optimal trading strategy is a function depending on the entire market history, and in order to find an optimal trading strategy, one must check an exponentially…

aesthesiaJan 21, 2020View on HNParent context

Here is a paper on it : https://arxiv.org/pdf/1002.2284.pdf

sudosysgenJan 21, 2020View on HNParent context

Your second point could only be true if markets were infinitely intelligent. https://arxiv.org/pdf/1002.2284.pdf

apiOct 28, 2019View on HNParent context

FWIW, someone took the time to formally state the case: "Markets are efficient if and only if P = NP", https://arxiv.org/abs/1002.2284

wahernSep 11, 2019View on HNParent context

This is unsurprising. P likely is not equivalent to NP [0], and predicting the market is NP-hard [1]. It's nice to see empirical work in the field, though, and especially nice to see reproductions of published papers. [0] https://www.scottaaronson.com/papers/pnp.pdf [1]…

lidHanteykAug 16, 2019View on HNParent context

Hi! I am a person who reads crankery. First, thank you for self-assessment. It's rare. This paper constructively suggests that P=NP iff EMH: https://arxiv.org/abs/1002.2284 It may be worth reading up on PPAD and Nash's thoughts on P=NP. Do not despair, but do not expect to be…

myWindoonnApr 23, 2019View on HNParent context

Markets are probably only efficient if P = NP, and it probably doesn't: https://arxiv.org/abs/1002.2284

rebeccaskinnerFeb 7, 2019View on HNParent context

> efficient markets are not deceptive markets. Participants are assumed to share equal information. Unfortunately this does not exist outside the textbook; there's an entire field devoted to information economics (Akerloff, Stiglitz et al). And then there's the brilliant…

pjc50Dec 17, 2018View on HNParent context

Even an efficient market will still have capital be more expensive for goods people disapprove of and aren't willing to support. An efficient market just means the price is discovered, not that the price solely reflects monetary outcomes. Plus there's probably no such thing as…

roguecoderAug 10, 2018View on HNParent context

Well, actually, they kinda do. Also, https://arxiv.org/abs/1002.2284

DannyBeeOct 19, 2017View on HNParent context

I dug it up for you: https://arxiv.org/abs/1002.2284 I thought it was fun.

nullcApr 21, 2017View on HNParent context

I don't see why you're being downvoted. Here's a reference for market pricing being almost certainly NP-hard: http://arxiv.org/pdf/1002.2284 "Markets are efficient if and only if P = NP"

pjc50Apr 8, 2016View on HNParent context

There was a nice result a while back that the efficient market hypothesis is true IFF P=NP. http://arxiv.org/pdf/1002.2284.pdf

fiatmoneyJul 8, 2015View on HNParent context

"Markets are efficient if and only if P = NP"[1] I read it when it was first posted on HN a few years ago. [1]http://arxiv.org/pdf/1002.2284.pdf

noblethrasherNov 13, 2014View on HNParent context

" a lot of competitors with essentially same product and everyone instantly know all available into (so everyone buys cheapest of the same)." But we already know these free markets are either not efficient or likely not efficient. Strong form efficiency is provably false. Weak…

DannyBeeAug 26, 2014View on HNParent context

(edited for source) There is no such thing as a free market: it is an idealistic theoretical construct. And even if it were real, it would only be efficient if P=NP[0]. 0. http://arxiv.org/abs/1002.2284

warfangleJul 15, 2014View on HNParent context

This might be slightly relevant here: http://arxiv.org/pdf/1002.2284.pdf

DewieFeb 20, 2014View on HNParent context

For starters, markets cannot be perfectly efficient unless P = NP: http://arxiv.org/pdf/1002.2284.pdf

m0th87Oct 22, 2013View on HNParent context

Markets are only efficient if P=NP. We do not seem to think that's the case. http://arxiv.org/abs/1002.2284

gte910hOct 5, 2012View on HNParent context

Direct link: http://arxiv.org/pdf/1002.2284v2 [PDF]

bradorSep 29, 2012View on HNParent context

It would be a boon for laissez-faire capitalism, as it would prove that markets are at least weak-form efficient. Reference: http://arxiv.org/abs/1002.2284

lyudmilApr 1, 2011View on HNParent context

> Efficient markets have already priced in all these well known reasons for one. Too bad there's no such thing as an efficient market [1]. [1] http://arxiv.org/abs/1002.2284

loewenskindAug 16, 2010View on HNParent context