The Paradox of Efficient Markets
If the typical marginal participant is so strong, why does the market exist at all? Why doesn’t the efficient money simply eat everything instantly?

Economists Sanford Grossman and Joseph Stiglitz formalized the answer in 1980. Stiglitz would later win the Nobel for this work.

The paradox: if markets were perfectly efficient—if prices fully reflected all available information—then no one would have incentive to gather information. Why spend money on research if the price already incorporates everything you could learn? But if no one gathers information, prices can’t reflect it. The efficient market eats itself.