Buy low, sell high: Price gaps and neoclassical theory

Robert Chambers () and Tigran Melkonyan ()

Journal of Mathematical Economics, 2009, vol. 45, issue 11, 720-729

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.

Keywords: Willingness; to; accept; Willingness; to; pay; Price; gap (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:45:y:2009:i:11:p:720-729

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