Your tautologically efficient market is not what economists or anyone else in the world is talking about when they talk about a market being efficient. In the trivial sense you’re posing the problem you would describe your market as satisfying people’s needs even if people had parasitic worms in their brains that tricked them into thinking that mouse traps cured cancer. In the real world, people buy mousetraps because they *expect* those mouse traps to be more valuable than the price, for some definition of value that does not include “they bought the mouse trap”. A pillar of one such value system might be “effectiveness at catching mice”. In this scenario, people might be mistaken—they could have bounded rationality, they could have exploitable cognitive biases abused by advertisers, etc. The thing that makes financial markets resilient against this sort of problem is the nice property that rational actors are incentivized to take advantage of other peoples’ missteps. Mouse trap buyers cannot do this—you can’t buy a hundred mouse traps from an underrated dealer to correct the market, and you can’t short a mouse trap dealer’s traps because they are running deceptive advertising.
Your tautologically efficient market is not what economists or anyone else in the world is talking about when they talk about a market being efficient. In the trivial sense you’re posing the problem you would describe your market as satisfying people’s needs even if people had parasitic worms in their brains that tricked them into thinking that mouse traps cured cancer. In the real world, people buy mousetraps because they *expect* those mouse traps to be more valuable than the price, for some definition of value that does not include “they bought the mouse trap”. A pillar of one such value system might be “effectiveness at catching mice”. In this scenario, people might be mistaken—they could have bounded rationality, they could have exploitable cognitive biases abused by advertisers, etc. The thing that makes financial markets resilient against this sort of problem is the nice property that rational actors are incentivized to take advantage of other peoples’ missteps. Mouse trap buyers cannot do this—you can’t buy a hundred mouse traps from an underrated dealer to correct the market, and you can’t short a mouse trap dealer’s traps because they are running deceptive advertising.
Yes. That is a limitation of the model.
No, it’s mot *my* model.
But within the model, marketing is one of the factors that determines the quality of a mousetrap.