Volume 6, No. 3 (Fall 2003)
Unfortunately, Peter Bossaerts’ text, The Paradox of Asset Pricing, offers no relief from past use of flawed methodologies. Bossaerts is professor of finance and director of the Laboratory for Experimental Finance at the California Institute of Technology. His manuscript is aimed at the academic/professional market and is based on a collection of his lectures, working papers, and published research. Based on the title and preface, one may assume that Bossaerts is launching a full-scale attack on the use of positivism and econometric empiricism in past attempts to study asset pricing; this view is quickly extinguished by the time the reader gets to page xi of the Preface. In terms of general methodology, he utilizes the same techniques and measures that most Austrian economists reject.
