On the wisdom, and madness, of markets

Illustration by Klaus Vedfelt. Article by Daniel Gross. Strategy + Business – January 27, 2022.

Are markets efficient by nature, capable of solving problems on their own? Or are markets remarkably inefficient, prone to irrationality and breakdown? The answer is yes, and yes. So much of business and economic analysis depends on the idea that companies and the individuals that make them up are rational actors who make decisions in their own self-interest, and that the market tends to sort things out. That’s certainly true over the long term. But, of course, in the short-term, it’s another story. […]

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