From: 13r43@math.ucrf.edu
Subject: Re: What is Market Efficiency.  was Re: ZERO Nuclear impact (was: Is car pooling for real? etc)
Organization: McGill University
Date: Thu, 30 Jul 1992 21:13:43 GMT

In article <1992Jul30.155601.28829@murdoch.acc.Virginia.EDU> crb7q@kelvin.seas.Virginia.EDU (Cameron Randale  
Bass) writes:
> In article <1992Jul30.054512.23993@cco.caltech.edu> carl@SOL1.GPS.CALTECH.EDU writes:
> >In article <1992Jul28.234406.2637@murdoch.acc.Virginia.EDU>, crb7q@kelvin.seas.Virginia.EDU (Cameron  
Randale Bass) writes:
> >>In article <1992Jul28.203807.18704@michael.apple.com> ems@michael.apple.com (E. Michael Smith) writes:
> >>>>>Market efficiciency has nothing to do with production.  
> >>>
> >>>Re-read that.  Twice.  NOTHING to do with PRODUCTION.  It has everything
> >>>to do with THE MARKET (i.e. the point where things are BOUGHT and SOLD.)
> >>>
> >>>MARKET efficiency just asks how effective the market is at communicating
> >>>REAL product differences and avoiding MONOPOLY PRICING.
> >>
> >>      Unfortunately all my econ texts are boxed, but:
> 
>      [my examples deleted]
> 
> >Or you might want to reread what he said a bit more carefully.  Economic
> >efficiency includes both market efficiency and efficiency of production. 
> >Michael referred specifically to the MARKET part.
> 
>      I read it the first time.  I do not agree that the concept of 
>      market efficiency is so narrowly defined.  For a more authoritative
>      response, see my response to Mr. Smith's farewell to me.
> 
> >>>It isn't strange at all.  You are continuing to confound MARKET efficiency
> >>>with PRODUCTION or DISTRIBUTION efficiency.  It has nothing to do with
> >>>government subsidy of production or taxation.  It has nothing to do
> >>>with the inherent safety of a product.  It has everything to do with
> >>>a vendor pricing that product higher than they otherwise could if the
> >>>purchaser had more perfect knowledge of the alternatives and costs.
> >>>(i.e. if advertizing wasn't creating bogus perceptions.)
> >>
> >>     Strange that I'd do that since, according to you, efficiency has nothing
> >>     to do with production or distribution.  I again suggest writing
> >>     the authors above so that people like me will not be further misled.
> >>     Have them differentiate between the different types of economic
> >>     efficiency more carefully.
> >
> >I'm afraid that it wouldn't do any good since you ignore the term "market" even
> >though Michael took the trouble to capitalize it.
> 
>      I did not ignore it.  I simply do not agree with his limitation of 
>      the concept 'market efficiency'.  Feel free to support your position 
>      with authoritative sources, though that may be a bit difficult.  
>      See my authoritative response in an article about Mr. Smith's killfile.
> 
>      Pricing and its efficiency are hardly limited to simply the
>      vibes of the buyers and sellers.  If we were talking about capital
>      markets, I might have to agree.  However, in the context of consumer
>      markets I still do not.
> 
>                                   dale bass
> -- 
> C. R. Bass                                           crb7q@virginia.edu
> Department of Mechanical and Aerospace Engineering
> University of Virginia
> Charlottesville, Virginia                            (804) 924-7926

--
Legalize freedom: Libertarian in '92.

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