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by yummyfajitas
5626 days ago
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Neither the paper I linked to nor the paper written buy the Princeton guys shows that equities markets are NP complete. They both show that markets in certain derivatives are NP complete. However, I made a mistake and linked to the wrong paper. Here is the correct one: http://dpennock.com/papers/fortnow-dss-2004-compound-markets... Basically, the result says that if you have a market in derivatives which pays off when certain formulas in propositional logic are true (e.g., a derivative which pays off if A && (!B || C) is true, for specific events A,B,C), then the auctioneer's matching problem is NP complete. The auctioneer's matching problem is simply market making, and if the market were efficient, this problem would already be solved (by looking at prices). I don't think that loewenskind's claim is true, for the most part, I was just providing a more detailed source on NP completeness of some markets. |
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