Complexity theorists, chimps, and stock markets.

Mainstream economic theory takes another shot to the heart with new evidence that randomness, not rationality, moves markets.

The insights have come from researchers who are interested in complexity, where the simple behaviour of many traders in a market governed by various rules can produce highly complex "emergent" behaviour (the waxing and the waning of share prices).

The effect is driven by non-linearity, which abounds in nature. To put it simply, a linear world is an idealised one where one plus one makes two. A nonlinear world - the one we live in - is where one thousand plus one thousand oranges could lead to something quite different from two thousand oranges, such as a marmalade factory.

One of the leading exponents of applying complexity theory to the markets is Prof Doyne Farmer of the Santa Fe Institute in New Mexico, where much of the pioneering work in the field was done. In work in the institute, and for the Prediction Company which he founded, he has tried to model human traders as simple software programs - called agents - to see if they can reproduce the behaviour of the London Stock Exchange.

The explanation of "fractal finance" is particularly interesting, though nothing competes with chimps in business suits.