Subjective asset pricing

Assuming there is no “objective” or real value for parameters about how the market works. This can be taken as such a parameter doesn’t exist, or that we can never hope to measure it because of the constant adjustments of the market through the market process. (basically, these parameters even if they did exist would constantly be a moving target)

Thus, we can think of parameters as existing inside a person’s mind/ mental model. We can model this process as “What would a person think/ value an asset as”. Then the market should be an aggregate of these individual valuations, giving rise to the Risk neutral density.

Linked ideas

Subjective OHMC - A way to model these subjective prices using a (Bayesian) subjective distribution.