Journal of Probability and Statistics
Volume 2010 (2010), Article ID 543065, 17 pages
Research Article

An Analysis of the Influence of Fundamental Values' Estimation Accuracy on Financial Markets

Graduate School of Business Administration, Keio University, 4-1-1 Hiyoshi, Kohoku-ku, Yokohama-city 223-8572, Japan

Received 14 September 2009; Revised 17 December 2009; Accepted 17 February 2010

Academic Editor: Edward Furman

Copyright © 2010 Hiroshi Takahashi. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This research analyzed the influence of the differences in the forecast accuracy of fundamental values on the financial market. As a result of intensive experiments in the market, we made the following interesting findings: (1) improvements in forecast accuracy of fundamentalists can contribute to an increase in the number of fundamentalists; (2) certain situations might occur, according to the level of forecast accuracy of fundamentalists, in which fundamentalists and passive management coexist, or in which fundamentalists die out of the market, and furthermore; (3) where a variety of investors exist in the market, improvements in the forecast accuracy could increase the number of fundamentalists more than the number of investors that employ passive investment strategy. These results contribute to clarifying the mechanism of price fluctuations in financial markets and also indicate one of the factors for the low ratio of passive investors in asset management business.