Anomalies

Lamont, O. A., & Thaler, R. H. (2003). Anomalies: The Law of One Price in Financial Markets. Journal of Economic Perspectives, 17(4), 191-202.

Type

Journal article

Intellectual base

Primary research

Year

2003

DOI

10.1257/089533003772034952

Link

https://doi.org/10.1257/089533003772034952

Cited from

biology_ecology, economics_finance

Cited by

2 citations across 2 artifacts.

Each citation links to the sentence it supports in the citing article.

Primes

• Arbitrage (Finance)
  • … in $50/BTC profit—a textbook violation of what Lamont and Thaler (2003) call the Law of One Price, whose persistent violations (the 3Com/Palm carve-out, "Siamese-twin" share pairs, closed-end fund discounts) demonstrate that even highly liquid markets can sustain large gaps between identical or near-identical claims.

    This sourceSurveys persistent violations of the Law of One Price in equity markets (3Com/Palm carve-out, twin/'Siamese-twin' shares, dual-class shares, closed-end funds, corporate spinoffs), all stemming from limits on rational-arbitrageur intervention—showing even highly liquid markets can sustain large gaps between identical or near-identical claims.

• Cross-Boundary Subsidy
  • The pairing with arbitrage is itself a transferable diagnostic — when a sustained cross-boundary flow is observed, the analyst asks whether it is closing a spread (arbitrage, where convergence is the expectation but not a guarantee)

Verification

This reference passed the adversarial substantiation pipeline: it was checked to exist and to support the claim it is attached to. See how references were verified.

Registry ID ref:6ec489287c97 · see in the full table