Inertia: Purposeful Inefficiencies in Financial Markets

Winner, 2025 Choice Outstanding Academic Title

Financial professionals are paid as if they were capable of “beating the market” on a regular basis. In fact, active fund managers routinely underperform low-cost index funds, and financial analysts frequently produce inaccurate stock recommendations—and many receive large fees even when their clients are losing money. Why do financial intermediaries still persist in the investing world despite this track record? Economic theory, obsessed with n...