Professor Eric So, the Sarofim Family Career Development Associate Professor at MIT Sloan School of Management, was invited to Fudan where he gave lectures to 2018 Fudan IMBA students. In the lectures, he shared his opinion on Alphanomics and idea generation.
Starting with a test in which students were asked to guess a number closest to the first 1/3 of the whole class, Professor Eric provided an introduction to Alphanomics: the informational underpinnings of market efficiency. The informational efficiency of security markets has been a central theme in financial economic research. He introduced research on the role of informational arbitrage in asset pricing from a starting point of observation that, with costly information, equilibrium prices will invariably reflect some mispricing.
Professor So also reviewed recent evidence of mispricing and reflected on its implications for future market-related research and how academic research could help lower information/arbitrage costs. For the second session, he introduced idea generation as the key differentiator among academics and investors, and successful people develop an intuition for where to look for new ideas.
These topics embarked active discussion among students. As one commented, “The lectures are refreshing, very different from commonly held belief of efficiency of market. Professor So presented very strong arguments against the efficiency of markets, their overall randomness.”
Written by 2018 IMBA Gong Yuanyuan
March 21st, 2019
