Efficient-market theory struggles more to explain sudden rises than crashes

Evidence

It is also perfectly possible that to inquire into the causes of the crash is to ask the wrong question. The fundamental challenge posed by the October events to efficient-market theory is to explain why such large price movements took place in the absence of major new information about economic prospects and the situation of America’s corporations. From this viewpoint, it may be the rebound in the afternoon of October 20 and on October 21 that is more challenging to explain than the price declines on October 19, for which reasonably plausible explanations, broadly compatible with economic orthodoxy, can be found. — Donald MacKenzie, An Engine, Not a Camera, 861

Categorization

• QUESTION: The asymmetry that analyst attention fixes on declines but not rises is worth chasing within the performativity literature — why do researchers naturalize up-markets?
• XREF: connects to: Market efficiency fails once attention becomes scarce, requiring corrective intervention — Yves Citton, The Ecology of Attention, 177; Mainstream economic models cannot explain when bubbles start or stop — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 519