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Inefficient Market
(redirected from Economically Inefficient)

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Inefficient Market
A market where prices do not always reflect available information as accurately as possible. Inefficient markets may result from a lag in information transferring to one place to another, deliberate withholding of information by an insider, or other reasons. Inefficient markets give rise to arbitrage opportunities. Most analysts believe that no market is perfectly efficient and that some inefficiency is inevitable. See also: Efficient Markets Hypothesis.

Inefficient market. In an inefficient market, investors may not have enough information about the securities in that market to make informed decisions about what to buy or the price to pay.

Markets in emerging nations may be inefficient, since securities laws may not require issuing companies to disclose relevant information. In addition, few analysts follow the securities being traded there.

Similarly, there can be inefficient markets for stocks in new companies, particularly for new companies in new industries that aren't widely analyzed.

An inefficient market is the opposite of an efficient one, where enormous amounts of information are available for investors who choose to use it.



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Some economists say that putting the burden of the housing collapse on the backs of homeowners is economically inefficient, and that it would be beneficial for the economy and the housing market if more people defaulted," White said.
The text message system also reduces the volume of time-consuming and economically inefficient incoming calls to the agent and complex.
But that's economically inefficient when we also continue to subsidize coal, oil and natural gas.
 
 
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