What is most interesting is that Bachelier’s work went unnoticed for
many years and then was taken up with such enthusiasm by economists.
Yet, even though this work was to become the very foundation of financial
market theory, there were those who, from the outset, saw that the whole
structure was unsatisfactory for exactly the reasons that I have suggested
are at the heart of our difficulties in macroeconomics. At the time that
Bachelier wrote his thesis, Henri Poincare´, the great French mathematician,
wrote the thesis report. He clearly stated that one should not take
this seriously as a way of modelling financial markets, as individuals do
not observe information independently and then act on it, but are constantly
influenced by others and will always be prone to herd behaviour.
To cite him precisely: