Black, indeed, came to express doubts even about the central intuition of orthodox financial economics: that modern capital markets were efficient, with prices in them incorporating all available price-relevant information. Efficiency held, he suggested, only in a diluted sense: "... we might define an efficient market as one in which price is within a factor of 2 of value." Black noted that this position was intermediate between that of Merton, who defended the efficient-market hypothesis, and that of the "behavioral" finance theorist Robert Shiller: "Deviations from efficiency seem more significant in my world than in Merton's, but much less significant in my world than in Shiller's." (Black 1986, p. 533; see Merton 1987 and Shiller 1989) Viewed from a distance, however, the differences between Black, Scholes, and Merton diminished Black's doubts about Merton's derivation were not public and the common core of their arguments became more salient.

Donald MacKenzie, An Engine, Not a Camera, loc. 604