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Is Fintech driving household asset allocation towards the law of one price?

Author

Listed:
  • Xu, Yueli
  • Guo, Binhua
  • Zhan, Shuwei
  • Lu, Yao

Abstract

The rapid advancement of Fintech has transformed financial markets, yet its impact on household asset allocation remains insufficiently explored. This study employs the Arrow-Debreu-McKenzie framework and data from the China Household Finance Survey to examine Fintech's "double-edged sword" effect. While Fintech enhances portfolio alignment with the Law of One Price by reducing costs and improving transparency, it also introduces deviations through information overload and herd behavior. The study finds that these effects vary significantly across income levels and between urban and rural households.

Suggested Citation

  • Xu, Yueli & Guo, Binhua & Zhan, Shuwei & Lu, Yao, 2025. "Is Fintech driving household asset allocation towards the law of one price?," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325003927
    DOI: 10.1016/j.frl.2025.107129
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