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Showing posts with the label market efficiency

The Coherence of the Market

"The [substitution] principle states that higher relative prices tend to discourage and lower relative prices encourage the use of a commodity or service. [Demand curves slope downward.] "If the principle of substitution is sufficiently strong, then decentralized markets are reliable tools for allocating output to households and input to businesses. However, in financial and capital-asset markets, in which speculative and conjectural elements are powerful, the principle of substitution does not always apply. A rise in the relative prices of some set of financial instruments or capital assets may very well increase the quantity demanded of such financial or capital assets. A rise in price may thus breed conditions conducive to another such rise." -- Hyman Minsky, Stabilizing an Unstable Economy , p. 106

Aren't These Twenties Lying on 34th Street?

The Knicks have two highly efficient shooters on the team: Steve Novak hits 48% of his threes, while Tyson Chandler hits 69% of his shots. The gives them adjusted field goal percentages of 67% and 69% respectively. Meanwhile, Carmelo Anthony has an AFG% of 43%. Yet Anthony shoots nearly twice as many shots per game as... Chandler? Novak? No, he shoots nearly twice as many shots per game as the two of them combined . So the Knicks offense is continually passing up a 7 in 10 shot at a bucket for a 4 in 10 shot. Am I the only one who sees something wrong here?