What is value?
Person A value a runner at $2.0 The market values it at $1.80
The market values a runner at $2.0 Person B be values it at $1.80.
Efficient market theory suggests the market is correct given no abnormal information. Buffet morphed into a market maker not a market taker.
Where does one find value in a 101% efficient market?
I think like this.
I would define value for a certain outcome as [value]=[probability]*[odds]-1
Hence value can have both signs and we should
Back if it's >0 and
Lay if it's <0.
If we see the market as "all the outcomes" we would almost always end up with negative value as you imply. But of course there do sometimes exist value for all the outcomes - an arbitrage situation.
Could an arbitrage situation exist in a fully efficient market? I would say no.
I think of "Efficient Market Theory" as a theory or maybe as a model. I believe the "true" market could be described more as "semi" efficient.
I think value are created when the supply and demand is "skewed" from example due to an over reaction to new information etc.