We have set out a general framework for adaptive belief systems in asset pricing thery. Fluctuations in prices and returns are driven by an evolutionary dynamics between traders with different expectations about prices.

Since the classic work of Feyerabend and Kuhn, the role of social factors in the scientific enterprise has been a major concern in the philosophy and history of science. In particular, the presence of social factors such as the desire for prestige or pressures to conform to accepted ideas, have...