Efficient Markets: My Own Definition

Over the last few decades, the dominant theory about a lot of the economy has been the so-called efficient market theory, which assumes that markets can operate in ways based on the simultaneous and well-informed calculations of numerous players, each making value-maximizing decisions. Events of the last two years have thrown this theory into question. So here is my alternative definition:

Efficient Market: A myth created by economists using outmoded assumptions about why people behave the way they do in economic transactions, but that produces neat and comforting formulas subject to elaborate mathematical manipulation for which PhD's can readily be granted. The myth is based on the almost universally false assumption that all actors have perfect information, that access to information is at the same time for all participants (see "automated computerized trading models"), that people value short-term losses and long-term gains equally, that people are not influenced by the behavior of others (see "herd behavior"), that people are able to value risks in mathematical ways and have a good intuitive sense of probability theory, and that no player is providing false or misleading information. The stock market is a good example of inefficient markets.