84 M. Renigier-Biłozor, R. Wiśniewskic) market functions – the ability to satisfy market participants’ basic needs and cater tochanging demands;d) market environment – the social and economic framework in which the RE marketoperates and which can be a source of crisis.The level of knowledge about the market and its participants is a factor that determinesthe efficiency of the RE market, but is often disregarded in market analyses.Knowledge gaps may originate with active market participants who have limited informationabout the system and its constituent elements. Other market participants may alsohave limited knowledge in this area. The knowledge manifested by entities conductingtransactions on the RE market is (according to theoretical assumptions) limited or negligent.The above implies that market participants conduct transactions without mutualknowledge which leads to asymmetry in the decision-making process. This could lowerthe efficiency and, consequently, the effectiveness of the entire market. Researchers analyzingthe RE market should also demonstrate a sufficient level of knowledge about themutual relationships between the subjects and objects of market transactions.From the analytical point of view, the solution to the problem requires the selectionof appropriate methods for analyzing the available information rather than, as it is oftenobserved in practice, the adaptation of the existing information to popular analyticalmethods, such as econometric models. In the era of globalization, quick and unified solutions(procedures, algorithms) are needed to enhance the objectivity and the reliabilityof research results. The preferred solutions should address the problem on a global scalewhile accounting for the local characteristics of the analyzed markets and the relevantinformation.This study attempts to prove the hypothesis that the efficiency of real estate marketsis identifiable and measurable.CLASSICAL THEORY OF MARKET EFFECTIVENESS AND ITSCONSEQUENCESAny discussion concerning the efficiency of real estate market participants wouldbe incomplete without a reference to the classical approach to market effectiveness (inparticular capital markets). In line with the assumptions made by this study, efficiencydetermines effectiveness. This chapter discusses the rudimentary concepts of market effectivenessvs. market ineffectiveness, market equilibrium vs. market imbalance, perfectvs. imperfect markets.According to the random walks hypothesis, developed in 1900 as the pioneer conceptin the theory of capital market effectiveness [Bachelier 1900], the expected rate of returnon an asset equals zero due to the random distribution of prices. Further research [Osborne1964] demonstrated that the fluctuation of prices on the capital market resembles Brownianmotion, i.e. the movement of particles in a fluid [Gabryś 2006, following Osborne].According to the random walks theory, this motion does not follow a specific patternor trend, but it is the effect of completely random changes as a result of which, the pricesfrom the past do not support the prediction of future prices [Szyszka 2003]. AccordingActa Sci. Pol.
The effi ciency of selected real estate markets in Poland 85to subsequent researchers, if prices are to reflect all available information, they shouldchange only when new information appears. Since information enters the market ina random fashion, price changes should also have a random character [Gabryś 2006].According to Fama [1990], an effi cient market is defi ned as a market where thereare large numbers of rational, profi t-maximizers actively competing, with each trying topredict future market values of individual securities, and where important current informationis almost freely available to all participants. In an effi cient market, competitionamong the many intelligent participants leads to a situation where, at any point in time,actual prices of individual securities already refl ect the effects of information based bothon events that have already occurred and on events which the market expects to takeplace in the future.Szyszka [2003] argued that if there are irrational investors on the capital market, theiractions are random in character and they neutralize each other without affecting the prices.If there is a larger group of irrational investors who make similar decisions, the effectsof their actions are eliminated by rational investors through arbitration.According to pioneer researchers in the area of real estate market efficiency, a marketis efficient if its fulfils the following theoretical assumptions:– it has an infinite number of participants who appraise the value of real estate independentlyin an effort to maximize the profit generated by real estate,– a single participant is unable to change real estate prices,– information that could affect real estate prices is generated in an uncorrelated manner,– information instantly reaches all market participants,– information is freely available,– there are no transaction costs,– all investors make instant use of the received information,– every investor has identical expectations as regards the information's effect on realestate prices and the expected return rate,– all market participants have identical investment horizons.In line with the above assumptions, prices are determined as follows [cf. http://www.naukowy.pl/...; Grossman, Stiglitz 1980]:––––prices ideally reflect the value of real estate at any moment,prices change instantly in response to new information, and they remain stable untilnew information enters the market,higher than average profits cannot be generated in the long run,prices change independently.Throughout decades, researchers came across examples demonstrating that market efficiencytheory does not always work. The early 1980s were marked by several anomaliesthat seemed to undermine the efficiency of financial markets. Those anomalies continueto be studied, while new irregularities are surfacing. A new field of study, behavioralfinance, was created to explain the phenomena that contradict the hypothesis of marketeffectiveness. Behavioral finance examines stock market anomalies by analyzing systematicerrors made by humans when predicting the future, a fact that has also been demonstratedby psychological research.Oeconomia 10 (1) 2011
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6 A. Gawrońska, S. Paszkowskicultu
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8 A. Gawrońska, S. Paszkowskinumbe
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10 A. Gawrońska, S. PaszkowskiTabl
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12 A. Gawrońska, S. PaszkowskiTabl
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The distribution of social security
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%180,0160,0140,0120,0100,080,060,04
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The distribution of social security
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22 R. Hryniewski, W. Mądry, D. Goz
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32 R. Hryniewski, W. Mądry, D. Goz
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- Page 64 and 65: 64 L. Mazal, K.J. RowlesTHE TIME SE
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- Page 118 and 119: 118 E. SzymańskaREFERENCESCoccossi
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134 J. WiśniewskaLong term viabili
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136 J. Wiśniewska--The level of re
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Oeconomia 10 (1) 2011, 139-148INNOV
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Innovativeness of food production e
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Innovativeness of food production e
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Oeconomia 10 (1) 2011, 149-158LOCAL
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Local governance activities in supp
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Local governance activities in supp
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Local governance activities in supp
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Local governance activities in supp
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Oeconomia 10 (1) 2011, 159-169CHANG
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Changes in rural women’s movement
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Changes in rural women’s movement
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Changes in rural women’s movement
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Changes in rural women’s movement
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Changes in rural women’s movement
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Ewa SzymańskaTourism function of M