literally, as in Keynes’ (1936) phrase, taking into account “what average opinion expects the average opinion to be.”
…perfect rationality in the market cannot be well defined. Infinitely intelligent agents cannot form expectations in a determinate way.
This type of behavior–coming up with appropriate hypothetical models to act upon, strengthening confidence in those that are validated, and discarding those that are not–is called inductive reasoning.
We see immediately that the market possesses a psychology. We define this as the collection of market hypotheses, or expectational models or mental beliefs, that are being acted upon at a given time.
the first(?) mention of a genetic model in the book
The section here on the election of Rutherford B. Hayes as president with significant help by the communication incumbent (Western Union) of the time sounds eerily like the influence which Facebook likely had on the election of Donald J. Trump. The more I read this the more I’m scared and can’t wait for yet another disruption of communication technology.
(Update: It turns out you can’t, you can do either one or the other, but not both.)