THE FIRST ELABORATION OF THE EFFICIENT MARKET HYPOTHESIS
GIBSON, George Rutledge. The Stock Exchanges of London, Paris, and New York. A Comparison. New York & London: G.P. Putnam’s Sons, 1889. Octavo, original burgundy cloth. $2200.
First edition of this survey of three of the most powerful stock exchanges, known for providing the finance world’s earliest known statement of the efficient market hypothesis.
Although this book contains fascinating turn-of-the-century information about three major stock exchanges—New York, London, and Paris, the work derives its greatest value from its careful presentation of what would come to be known as the “efficient market hypothesis.” Gibson stated: “… and when these shares become publicly known in an open market, the value which they there acquire may be regarded as the judgment of the best intelligence concerning them.” In other words, Gibson argued that the prices on traded assets reflect all publicly available information. The actual efficient market hypothesis that resulted from his statement now exists in three variations: “weak” EMH, which argues that asset prices reflect all past publicly available information; “semi-strong” EMH which claims that prices reflect all publicly available information and are immediately responsive to new information; and “strong” EMH which claims that prices reflect even hidden information. The first two variants of EMH are endorsed by many, while strong EMH has been largely debunked by empirical evidence. In general, it is agreed by most that the market is broadly efficient, even taking into account evidence that suggests the opposite. Library stamp. Occasional faint red underlining and starring to text.
Light expert restoration to spine ends, corners and front inner hinge, mild toning to spine. A handsome copy.