An empirical study of efficient market hypothesis and its existence in virtual markets

Table of Contents

Chapter 1 - Introduction

1.1 Origin of Efficient Market Hypothesis

1.2 Aims and Objectives of the Research

1.3 Outline of the Chapters

Chapter 2 - Literature Review

2.1 Introduction

2.2 Market Efficiencies

2.3 Information Announcements in Capital Markets

2.4 Anomalies in Capital Markets

2.5 Intra-Day Effect

2.6 Judgments and Values in Computer Games

2.7 Common Exchange Mechanisms

2.8 Regulation of Virtual Markets

2.9 Chapter Summary

Chapter 3 - Methodology

3.1 Introduction

3.2 Research Questions

3.3 Quota Sampling

3.4 Method of Data Collection

3.5 Method of Data Analysis

3.6 Limitations and Validity of the Research Method

3.7 Ethical Consideration

3.8 Chapter Summary

Chapter 4 - Findings and Analysis

4.1 Introduction

4.2 Expected Results

4.3 Actual Results

4.4 Chapter Summary

Chapter 5 - Discussion

5.1 Introduction

5.2 Do in-game virtual markets suffer from the Intra-Day Effect?

5.3 What happens when new information becomes publicly available?

5.4 Does this reflect what happens in real world markets?

Chapter 6 - Conclusion

6.1 Implication of this Research

6.2 Limitations and Further Research

Research Objectives and Core Themes

The primary aim of this dissertation is to analyze the Efficient Market Hypothesis within the context of virtual economies, specifically investigating whether market anomalies like the intra-day effect exist and how these markets react to public information announcements.

• Analysis of Efficient Market Hypothesis in virtual environments.
• Examination of market anomalies, with a focus on the intra-day effect.
• Investigation of market reactions to public information announcements.
• Comparison of virtual market behaviors with real-world capital market patterns.
• Evaluation of market efficiency forms (weak, semi-strong, strong) in in-game economies.

Excerpt from the Book

Summary of Chapters

Chapter 1 - Introduction: This chapter introduces the Efficient Market Hypothesis and outlines the dissertation's aims to investigate this theory within a virtual FIFA football market.

Chapter 2 - Literature Review: The literature review critically analyzes existing research on market efficiency, information announcements, and various market anomalies to establish a theoretical framework.

Chapter 3 - Methodology: This chapter details the quota sampling of player cards, the secondary data collection methods from FUTBIN, and the statistical techniques used for analysis.

Chapter 4 - Findings and Analysis: This chapter presents the empirical results, comparing expected outcomes derived from literature with the actual findings regarding card price movements.

Chapter 5 - Discussion: The discussion interprets the research findings, addressing the core research questions regarding the intra-day effect and market reactions to new information.

Chapter 6 - Conclusion: The conclusion summarizes the study, confirming the existence of anomalies while noting the market's semi-strong form efficiency in reaction to announcements.

Keywords

VIRTUAL-MARKETS, EFFICIENT-MARKET-HYPOTHESIS, MARKET-ANOMALIES, INFORMATION-ANNOUNCEMENTS, INTRA-DAY-EFFECT, FIFA, FUT-COINS, PRICE-MOVEMENTS, SEMI-STRONG-FORM-EFFICIENCY, VOLATILITY, ARBITRAGE, SECONDARY-RESEARCH, DATA-ANALYSIS, MARKET-OVERREACTION

Frequently Asked Questions

What is the primary focus of this dissertation?

The study primarily investigates the validity of the Efficient Market Hypothesis within the virtual economic environment of the FIFA Ultimate Team game.

What are the core thematic fields covered?

The research covers financial market theory, specifically focusing on market efficiency, capital market anomalies, information announcements, and the behavior of virtual economies.

What is the main research question of the work?

The study aims to determine if in-game virtual markets experience the "intra-day effect," how they react to public information, and whether these behaviors parallel real-world market patterns.

Which scientific methods are employed?

The research uses secondary data collection through a quota sample of 118 player cards, applying statistical tests such as mean, standard deviation, and coefficient of variance analysis.

What topics are discussed in the main body?

The main body discusses the origin of EMH, a comprehensive review of literature on anomalies, the methodology for virtual market analysis, and a discussion of the empirical findings regarding price volatility.

Which keywords best characterize this research?

Key terms include Virtual-Markets, Efficient-Market-Hypothesis, Market-Anomalies, Information-Announcements, and Intra-Day-Effect.

How does the virtual market respond to new information?

The analysis shows that while there is an initial market overreaction to announcements, the market eventually demonstrates semi-strong form efficiency by readjusting to a new equilibrium.

What specific anomaly was identified in the FIFA market?

The study identified a significant intra-day effect on Wednesdays, characterized by extreme price volatility and a 233% price increase prior to the "Team of the Week" announcement.