# Market efficiency `kaal:entity:market-efficiency` **Status.** derived This node is assembled mechanically from the 10 claims that carry the concept tag `market-efficiency`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 10 claims across 9 works, 2015 to 2022. **2015** - [2629451-004](https://wulfkaal.github.io/claims/2629451-004) [empirical/evidenced] -- There is no systematic price momentum beyond the three core N/DPA event dates, which the authors read as evidence that the market is reasonably efficient with respect to N/DPA information. > We observe no systematic price momentum beyond the three core dates identified in our study, implying that the market is reasonably efficient with respect to information about N/DPAs. Wulf A. Kaal, Timothy Lacine, Stock Price Response to Non- and Deferred Prosecution Agreements (2015). SSRN: https://ssrn.com/abstract=2629451 **2018** - [3128900-039](https://wulfkaal.github.io/claims/3128900-039) [mechanism/argued] -- Removing centralized fees produces a more efficient marketplace for workers, verifiers, and requesters alike by eliminating rent seeking intermediaries, leaving gas for posters as the only cost. > The lack of fees on the Semada platform creates a more efficient marketplace for workers, verifiers, and requesters alike through the removal of the rent seeking intermediators. Wulf A. Kaal, Decentralized Mechanical Turk Through Verified Reputation (2018). SSRN: https://ssrn.com/abstract=3128900 **2019** - [3406323-013](https://wulfkaal.github.io/claims/3406323-013) [mechanism/argued] -- Because decentralized cryptocurrency platforms have lower cost structures, they can remove the consumer fees integral to centralized competitors, which eradicates downward pressure on platform worker compensation and creates a more efficient marketplace by removing rent seeking intermediaries. > Removing such centralized fees also allows for the eradication of downward pressure on the platforms' worker compensation. The lack of fees can help create a more efficient marketplace through the removal of the rent seeking intermediators. Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323 **2021** - [3782191-036](https://wulfkaal.github.io/claims/3782191-036) [failure/argued] *(failure mode)* -- Centralization is dangerous in any market because monopolies ruin market efficiency by impairing liquidity, while the most efficient and liquid markets have high transaction rates of many goods moving between many small players. > In any market, centralization is dangerous. Monopolies ruin the efficiency of a mar- ket—they impair its liquidity. Craig Calcaterra, Wulf A. Kaal, Preface to (2021). SSRN: https://ssrn.com/abstract=3782191 - [3782201-038](https://wulfkaal.github.io/claims/3782201-038) [mechanism/argued] -- Interoperability, meaning the API economy, is most efficiently achieved in the long run on decentralized platforms, because negotiations on a level playing field are fairer, resolve quicker, and encourage more business. > Interoperability, the API economy, is most efficiently achieved, in the long run, on decentralized platforms. Negotiations made on a level playing field are fairer, resolve quicker, and encourage more business. Craig Calcaterra, Wulf A. Kaal, Future of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782201 - [3782216-019](https://wulfkaal.github.io/claims/3782216-019) [mechanism/argued] -- Decentralization empowers knowledge at the edge: individuals with fine grained information about their neighbors and community can make better underwriting decisions than a centralized hierarchy can. > Decentralization empowers knowledge at the edge. Individ- uals with more fine-grained information about their neighbors and community can make better underwriting decisions than a centralized hierarchy can. Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216 - [3995709-026](https://wulfkaal.github.io/claims/3995709-026) [mechanism/asserted] -- Decentralized code review underwriting makes the code review market more efficient because it democratizes the functions of code review and frees untapped sources of power and knowledge. > Decentralized code review underwriting democratizes the functions of code reviews. This makes the code review market more efficient because it frees untapped sources of power and knowledge. Wulf A. Kaal, How DAOs Optimize Open-Source Code Reviews and Create Open-Source Standards (2021). SSRN: https://ssrn.com/abstract=3995709 **2022** - [4033886-010](https://wulfkaal.github.io/claims/4033886-010) [mechanism/argued] *(failure mode)* -- Arbitrage trading emerges in crypto markets because of information asymmetries across exchanges, which arise from imperfect disclosure, and the resulting decline in market efficiency is a key indicator of an inefficient market. > The reason arbitrage trading starts to happen is because of asymmetries of information across the different exchanges. These asymmetries can happen as a result of imperfect disclosures or incite on whether a company has a willingness to take on debt. Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886 - [4067783-037](https://wulfkaal.github.io/claims/4067783-037) [mechanism/argued] *(failure mode)* -- Centralization and monopolies are a threat to market liquidity because they can carry too much mass or too much velocity, and an imbalance in either direction, too much mass and too little velocity or too little mass, damages the market. > When there is too much mass and not enough velocity, it can gunk up the engine - when there is too little mass in the market, it can be cleared too quickly. Centralization and monopolies are a threat to market liquidity as they can have too much mass or too much velocity. Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783 - [4067783-038](https://wulfkaal.github.io/claims/4067783-038) [mechanism/argued] -- Decentralized structures outperform centralized ones on liquidity because in them market mass and velocity are uncorrelated, which yields more stable and predictable liquidity. > Decentralized structures are better because mass and velocity are uncorrelated Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/market-efficiency.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.