Price discovery by the market's mind: an investor's perspective on numerical archetypes

Abstract

The aim of this paper is to contribute to Jung's later work, with a particular focus on the numerical archetypes viewed from an investor's perspective. It attempts to achieve this via a three-pronged approach. First, placing complex psychology in the framework of complexity theory allows a robust acknowledgement and treatment of ‘elusive’ macroscopic properties, i.e. archetypal dynamics, involved in the ordering of a mind as a complex adaptive system. Second, modern insights in number sense (the direct intuition of what numbers mean) provide neuroscientific support for numerical archetypes and clarify their primacy. Third, this paper points to the empirical relevance of numerical archetypes in price discovery, the self-organizing principle of the capital markets (which allocate resources in modern society). The resulting proposition is that the (collective) mind's unconscious and conscious forces can be considered as ‘intelligent’ agents. The competition between these two domains provides the necessary condition to endogenously generate innovative outcomes, the essential capability of complex adaptive systems. According to this view producing such adaptive novelty is achieved in the form of intuitive insights and imagination, which result in a vast array of symbols, e.g. prices in the case of the market's mind.