Reflexivity Theory

From Weekly I/O#52

Article: Reflexivity Definition

This theory is like the Matthew effect applied to the economy and finance world. Like what we covered in Weekly I/O#49.3 about Relative Age Effect (RAE), accumulated advantage can lead to positive feedback loops. However, compared to Relative Age Effect (RAE), I think reflexivity theory (or Matthew effect in price) should be more short-term and more certainly will return to their equilibrium prices.

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