Inefficient market

(redirected from inefficiency)
Also found in: Dictionary, Thesaurus, Legal, Acronyms, Wikipedia.

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.

Mentioned in ?
References in periodicals archive ?
The fixed-effects treatment (and within estimation) does not require a distributional assumption of inefficiency or an uncorrelation assumption of inefficiency with regressors.
These SFMs consist of a production function and an inefficiency equation.
The problem could be partially resolved if the Harberger triangle was accompanied by a discussion of bottom-up inefficiency, but, because pictures tend to guide the discussions, that often does not happen.
In subsequent sections, the firm-specific inefficiency measures are related to growth, the persistence of profits, and change in market concentration.
No change in the general climate of political thought over the last 10 or 15 years has been as dramatic as the one in the attitude toward government: We've gone from intellectual dishonesty about the genuine issue of inefficiency all the way over to a prevailing conviction of government's complete inefficiency.
Finally someone is addressing the significant amount of waste and inefficiency that has plagued our industry since inception.
Pervez Elahi has alleged that flood devastations was due to inefficiency of chief minister Punjab Shahbaz Sharif.
In the latter approach, allocative inefficiency (defined as the deviations of the first order conditions of profit maximization or cost minimization) is modeled through shadow (virtual) prices which are parametric functions of observed prices.
The point is not that government is efficient--it is not--but that the cure for its inefficiency does not lie in hyped-up nostrums from the business world.
XML continues to be adopted as the "lingua franca" of the Internet, but the programming inefficiency of this text-based protocol leads to inefficient applications that bog down enterprise systems.
0 are taken to imply that scale inefficiency is trivial.