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Buy low, sell high: Price gaps and neoclassical theory

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  • 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.

Suggested Citation

  • Chambers, Robert G. & Melkonyan, Tigran A., 2009. "Buy low, sell high: Price gaps and neoclassical theory," Journal of Mathematical Economics, Elsevier, vol. 45(11), pages 720-729, December.
    • Handle: RePEc:eee:mateco:v:45:y:2009:i:11:p:720-729
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    References listed on IDEAS

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