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Comment by api | Hacker News Reader

If markets were perfectly efficient, entrepreneurship would not exist. An entrepreneur is, at this level, someone who looks for an arbitrage opportunity in correcting a market inefficiency, usually of the form "there is a market for X, X could be provided, but X is not currently provided."

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That seems to stretch the meaning of market inefficiency. Is the lack of unlimited free energy an inefficiency in a market? Because an entrepreneur who achieves that is going to do pretty well. I’d say that would be creating value not optimizing market efficiency.

Yeah, and arbitrage. Arbitrage is exploiting the difference in prices of the same asset between two markets. Arbitrage is also risk-free or darn close to it. Entrepreneurship is anything but. Arbitrage is not "gee this product doesn't exist, I'll start a company and invent it and manufacture it and sell it" ...

How would creating unlimited free energy allow an entrepreneur to do pretty well? It it's free, there's no money to be made.

Seems like t is a very critical variable then. For example, you could imagine a particular market is "perfectly" efficient at the moment (however you want to define the boundaries of a particular market), and there is no opportunity. But then a completely unrelated company or university makes a fundemental advancement in materials science that fundamentally changes the landscape. An exogenous shock in other words.

In a certain sense I guess this is why every anti-trust suit fundamentally comes down to defining the market bubble more than anything else.

In perfectly efficient markets, arbitrage gets paid exactly as much as it costs to discover and execute the arbitrage. Entrepreneurs would still exist, they would just be ambivalent between finding new arbitrage opportunities and seeking market-rate employment for their skills in finding arbitrage.

Ok so the market is perfect... but I exist and have labor to provide. Am I not naturally an "inefficiency" by not participating in the market? Therefore by participating alone, I have a new wrinkle to work from?

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