medium · Market Microstructure adverse-selection

According to the 'Grossman-Stiglitz Paradox,' why can markets never be perfectly informationally efficient?

1. Most traders are fundamentally irrational and simply ignore all relevant fundamental valuation data when setting prices.
2. High-frequency traders cancel their resting orders too quickly for the underlying information to ever be absorbed by the market.
3. If prices were perfectly efficient, there would be no profit incentive to collect the information required to make them efficient.
4. Strict regulatory barriers and costly disclosure rules prevent most ordinary traders from acting on all available public market information.

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