First it is necessary to define what exactly is meant by efficiency.

However, the analysts of today are perhaps keeping their findings tothemselves.Efficient markets imply analysts who adopt a passive strategy of picking stocksare as likely to be as successful as those who pursue an active policy ofresearch and analysis.

Efficient Markets Hypothesis: Impossible

I intend to show that on the whole both markets areefficient, although some inefficiencies persist.

Grossman and Joseph Stiglitz in ..

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Grossman, Sanford J., and Joseph E

Yet, as the Grossman-Stiglitz paradox outlines, ifeveryone adopted a passive strategy, some securities would be undervalued andopportunities for successful technical and fundamental analysis would arise.

Stiglitz show that it is impossible for a market to be perfectly informationally efficient.

The efficient markets hypothesis: ..

Securities markets are therefore semi-strong efficient: publicinformation is rapidly incorporated into, and sometimes even anticipated by,prices.An interesting extension of these tests has been to test for market volatilityprevious to and after events.

of the Efficient Market Hypothesis ..

However, the semi-strong form states that publicly available information isquickly assimilated, if not anticipated, by the market, so that as more playersenter the market, inefficiencies are quickly eliminated.Tests of semi-strong efficiency in securities markets have centred around thestudy of events.

Hence, betting markets, like securities markets,are weak form efficient.

Better Economics: EMH and the Grossman Stiglitz paper

"Second, perfect efficiency is an unrealistic benchmark that is unlikely to hold in practice. Even in theory, as Grossman and Stiglitz (1980) have shown, abnormal returns will exist if there are costs of gathering and processing information. These returns are necessary to compensate investors for their information-gathering and information-processing expenses, and are no longer abnormal when these expenses are properly accounted for. In a large and liquid market, information costs are likely to justify only small abnormal returns, but it is difficult to say how small, even if such costs could be measured precisely."
Campbell, Lo and MacKinlay (1997), page 24

To test for strong market efficiency we are compelled to analyse thereturns of  insiders.

Efficient Markets Hypothesis: History

While in the past these werethought to be unstable and inconsistent, a new breed of analyst, armed withsuperior data, are utilising new statistical, mathematical, and computertechniques to anticipate market reactions to exploit these inefficiencies.In a study on our attitudes to risk, Tversky (1988) demonstrates that we arenon-linear in our thinking: we are risk averse when expecting a gain and riskseeking when facing a loss. This isconsistent with Gruens (1976) analysis of betting markets.

This paper began with an analysis of the efficiency of securities and bettingmarkets.

Grossman and Stiglitz (1980) on informationally efficient ..

His findingsshow that not one of the tipsters earned a positive return after the bookiestake is subtracted, from which Snyder deduces that betting markets are strongform efficient.This analysis raises a number of difficulties.