Capital markets research and real world complexity: The emerging challenge of chaos theory

Autor: Tom Mouck
Rok vydání: 1998
Předmět:
Zdroj: Accounting, Organizations and Society. 23:189-215
ISSN: 0361-3682
DOI: 10.1016/s0361-3682(97)00004-4
Popis: The theories of chaos and complexity are presented as a wide-ranging new vision of the relationship between order and disorder, a new vision that is challenging many of the fundamental presuppositions of the older Newtonian world view of science. The implications of the new vision are explored in terms of their challenges to the methodological views widely espoused by capital market researchers in accounting, most notably with respect to the assumptions of linearity and predictability. Mandelbrot's early studies of economics and financial time series data, which provided many of the insights for his conception of fractals, are reviewed in terms of their challenges to the conceptual framework of the traditonal capital markets research paradigm and its extension to financial reporting issues. Contemporary studies which are reviving Mandelbrot's challenges are also reviewed, with the conclusion that they are weakening the intellectual hold of the tradtional capital markets paradigm and making it more susceptible to overthrow by a competing paradigm. Finally, an emerging new research program associated with the Santa Fe Institute (SFI) is reviewed. SFI researchers are studying financial markets as complex adaptive systems. Their preliminary findings are incompatible with the widely presumed theoretical linkage between financial reporting systems and economic efficiency, and they tend to undermine the traditonal rationale relating earnings to stock prices.
Databáze: OpenAIRE
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