Whoops, I missed this. This is the fatal flaw in the model. In any real economy, not all participants have access to the same information. People with access to good information can profit at the expense of those who don't, by buying undervalued investments and selling overvalued ones. I don't see how that's "conflating away the issue" or "irrational", that's just common sense. (It also allows one to put an exact price on the act of acquiring good information, but that's another story.)