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Buy low, sell high: Price gaps and neoclassical theory

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Listed author(s):
  • Chambers, Robert G.
  • Melkonyan, Tigran A.

Abstract

This paper considers the simple neoclassical economics of price gaps in the absence of income effects. Our guiding principle is that price gaps reflect a fundamental economic principle: buy low and sell high. It is demonstrated that neoclassical theory makes clear and economically testable predictions about these price gaps.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304-4068(09)00058-5
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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 45 (2009)
Issue (Month): 11 (December)
Pages: 720-729

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Handle: RePEc:eee:mateco:v:45:y:2009:i:11:p:720-729
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

Keywords: Willingness to accept Willingness to pay Price gap;

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