Why Financial Markets Will Remain Marginally Inefficient?

TL;DR

This paper argues that financial markets will remain marginally inefficient due to inherent structural reasons, and not because of lack of arbitrage opportunities, emphasizing the persistent nature of market inefficiencies.

Contribution

It provides a theoretical perspective explaining why market inefficiencies persist and are unlikely to be fully arbitraged away, challenging the assumption of market efficiency.

Findings

Market inefficiencies are rooted in structural factors.

Arbitrage is not always rational or feasible.

Markets will remain marginally inefficient.

Abstract

I summarize the recent work on market (in)efficiency, highlighting key elements why financial markets will never be made efficient. My approach is not by adding more empirical evidence, but giving plausible reasons as to where inefficiency arises and why it's not rational to arbitrage it away.