Introduction Adaptive Markets is a book detailing the Adaptive Market Hypothesis proposed by the author. It aims to improve the current dominant economic theory, the Efficient Market Hypothesis, with behavioural economics. This is not a pure finance book as it references several fields, ranging from evolution to psychology. This book has received many recognitions in the business and finance field. Author Andrew W. Lo is a Professor of Finance at MIT Sloan School of Management. As an academic, he has published numerous articles in his field. Other than that, he is also the author of several books related to economics, business and finance. He has a number of awards under his belt. He is also involved in the investment business through AlphaSimplex Group. Content Adaptive Markets starts with an introduction and the main body is divided into 12 chapters. The introduction gives a brief explanation on the birth of the adaptive market hypothesis. The author first explains some basic economic theories and their application. He also points out the shortcomings of these theories. Then he uses results from biology, neuroscience, psychology, sociobiology and theory of evolution to point out the need of a new theory. After that, he moves on…