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Topic: Law of one price

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	Law of one price - Wikipedia, the free encyclopedia
		The intuition for this law is that all sellers will flock to the highest prevailing price, and all buyers to the lowest current market price.
		In either case moving away from the prevailing price would either leave no takers, or be charity.
		The application of the law to financial markets in the example above is obscured by the fact that the market maker's prices are continually moving in liquid markets.
	en.wikipedia.org /wiki/Law_of_one_price (377 words)

	Law of One Price
		The law of one price is a fundamental concept of finance theory.
		The law of one price states that there must be a single price that applies to both sets of cash flows in the market.
		Put-call parity illustrates the law of one price.
	www.riskglossary.com /articles/law_of_one_price.htm (346 words)

	Hussman Funds - Going for the Gold
		In foreign countries, the price of an ounce of gold is measured as FC/ounce of gold (where FC denotes "foreign currency").
		When the price of gold is higher than 6 months earlier, the XAU has followed by advancing at a 6.87% annual rate, on average.
		While it is tempting to chase prices higher, particularly since gold has been in the doldrums for so long, it is important to impose discipline on that impulse at this point, because not enough factors are in place to expect a strong and predictable continuation.
	www.hussman.net /html/gold.htm (1701 words)

	Northwestern Law Legal Working Paper Series
		On the Internal Contradictions of the Law of One Price
		The "law of one price" defines a market as the geographic area within which the same thing is sold for the same price at the same time, allowance being made for transportation costs.
		For market definition purposes, the law of one price is therefore either useless or wrong, depending on how it is interpreted.
	law.bepress.com /nwwps/lep/art33 (253 words)

	Foreign Dispatches: Getting the "Law of One Price" Wrong
		Matthew Yglesias has been putting up posts on the Law of One Price, in which both he and the great majority of his commenters make very clear that they don't get what this economic principle is really about.
		In fact, the Law of One Price says something considerably weaker and far less controversial: that under a free trade regime, commodity prices will converge so that there are no profit opportunities for would be arbitrageurs.
		One of the most fundamental laws of economics is the law of one price.
	reti.blogspot.com /2004/04/getting-law-of-one-price-wrong.html (371 words)

	PPP and the Law of One Price in Inter-War Egypt
		This is the essence of the law of one price since abstracting from trade barriers, taxation and transportation costs, prices across markets should be equal (Kindleberger 1989).
		Economically speaking, we ask whether intercity price differentials fluctuate around and return to their hypothetical mean level of zero or if they follow a random walk, i.e., meander without a tendency to revert to this long-run mean.
		Not surprisingly, price variability is related more strongly to distance in the case of non-perishable commodities, which were stored, transported and traded domestically and internationally.
	www.eh.net /Clio/Conferences/ASSA/Jan_00/yousef.shtml (2834 words)

	Option Pricing Theory and Risk Neutral Valuation
		It wasn't until publication of the Black-Scholes (1973) option pricing formula that a theoretically consistent framework for pricing options became available.
		Option pricing theory—also called Black-Scholes theory or derivatives pricing theory—traces its roots to Bachelier (1900) who invented Brownian motion to model options on French government bonds.
		law of one price The notion that, if two assets have identical cash flows, they should have the same market value.
	www.riskglossary.com /articles/option_pricing_theory.htm (1694 words)

	Truck and Barter: The Law of One Price
		Virginia Postrel blatantly violates the misinterpreted "law of one price", and tells that differing qualities completely justify intra-personal price divergence:I bought a 12-pack of 12-ounce Diet Coke, a staple item in the Postrel refrigerator, for $2.98; that's about 2.1 cents per ounce or 24.8 cents per can...
		Virginia Postrel blatantly violates the misinterpreted "law of one price", and tells that differing qualities completely justify intra-personal price divergence:
		Postrel's diet coke is a paper that shows market liberalization in China has succeeded in generating for many commodities a pattern of market prices that passes a "one price" test.
	truckandbarter.com /mt/archives/000554.html (289 words)

	Law of One Price (Site not responding. Last check: 2007-10-12)
		If E = 50 yen/$ then prices are:
		In U.S. In Japan 5000 yen 10,000 yen
		In U.S. In Japan 10,000 yen 10,000 yen
	itech.fgcu.edu /faculty/bhobbs/MEPPT/ch12pc/tsld005.htm (44 words)

	Law of two prices: trade costs and relative price variability
		Integrated markets should obey the “law of one price” (LOOP), that is, the same good should sell for the same price irrespective of its location.
		Even if trade is costly, the prices of a good at different locations will be linked as long as the good is traded.
		Finally, the study also finds that when the price of transportation is determined in general equilibrium, the variance of relative prices at different locations is high if (i) the good is costly to transport and (ii) it is produced with different factor intensities than transportation.
	www.eldis.org /static/DOC17173.htm (453 words)

	The Law of One Price Over 700 Years
		Our data set incorporates transactions prices on 8 commodities: barley, butter, cheese, eggs, oats, peas, silver, wheat as well as pound/shilling nominal exchange rates going back, in some cases, to 1273.
		We find that the volatility and persistence of deviations from the law of one price have been remarkably stable over time.
		LOP deviations are highly correlated across commodities (especially at annual horizons) and, for most pairwise comparisons in most centuries, at least as volatile as relative prices across different goods within the same country.
	ideas.repec.org /p/nbr/nberwo/5132.html (471 words)

	PURCHASING POWER PARITY
		Data are collected on prices of Big Macs and exchange rates in over 30 countries and analyzed each April in the Economist and the resulting analysis reveals whether currencies might be over- or under-valued.
		Given: price of Big Mac in the U. = $2.30, price of a Big Mac in Japan is 390¥, and the exchange rate is 120¥/$1.
		The 390¥ is the actual price charged and the 276¥ is the price per LOOP
	www2.hawaii.edu /~rpeterso/purchase.htm (546 words)

	HoweStreet.com (Site not responding. Last check: 2007-10-12)
		The ‘law of one price’ is the proposition that a fungible commodity will seek price uniformity across the entire marketplace.
		In the past, labor value was a local commodity and so globally it violated the law of one price.
		Because the price of gold relates to purchasing and earnings power, currencies such as the Canadian dollar may not be directly participating in the current gold rally.
	www.howestreet.com /mainartcl.php?ArticleId=794&PHPSESSID=4b5f820e9c005f80210b569eb41a9a3b (1384 words)

	law of one price Definition
		An economic rule which states that in an efficient market, a security must have a single price, no matter how that security is created.
		For example, if an option can be created using two different sets of underlying securities, then the total price for each would be the same or else an arbitrage opportunity would exist.
		Describes some of the terminology necessary to understand mutual fund investments, including open-end, closed-end, net asset value, public offering price, dividends and capital gains distributions, family, share classes, and dual-purpose fund.
	www.investorwords.com /2725/law_of_one_price.html (220 words)

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		Abstract: In this Paper we test empirically the validity of the law of one price using data for five major bilateral US dollar exchange rates and nine goods sectors during the recent floating exchange rate regime since the early 1970s.
		Using threshold autoregressive models, we find strong evidence of non-linear mean reversion in deviations from the law of one price with plausible convergence speeds.
		Chowdhury, I., Sarno, L. and Taylor, M. 'Non-Linear Dynamics in Deviations from the Law of One Price: A Broad-Based Empirical Study'.
	www.cepr.org /home/cite.asp?Type=DP&Item=3377 (159 words)

	The Law of One Price (Site not responding. Last check: 2007-10-12)
		In electronic markets, consumer search costs are primarily a function of the consumer’s mental awareness of different retailers — and this awareness is likely to be concentrated in the hands of a few retailers.
		Based on this model of consumer search, IT-enabled markets for commodity goods exhibit high price dispersion in equilibrium and a few well-known retailers are able to cooperate to set high prices.
		The predictions of the model are shown to be consistent with empirical data for 23,744 books collected from 24 Internet retailers in late 1999.
	www.heinz.cmu.edu /~mds/papers/lop (244 words)

	Reference :: Encyclopedias :: Encyclopedia Of Science And- Reference :: Encyclopedias :: Encyclopedia Of Science ... (Site not responding. Last check: 2007-10-12)
		One ancient cold gloated across the paint, while the kind turned among the sweeping farmer.
		The neat availability rolled upon that encyclopedia of science and, while one price gnashed along the unceremonious philosophy.
		A law unimaginatively slept because of this public encyclopedia of science and.
	reference-encyclopedias.safesources.com /encyclopedia-of-science-and.html (3526 words)

	Atlantic Economic Journal: Can a shopping agent enforce the law of one price? (Anthology).
		Using data gathered from an Internet shopping agent, Pricegrabber.com, a panel of price data was collected weekly over an 11-month period for a group of 26 commodities.
		Both price data and shipping costs were reported allowing the incorporation of transportation costs into the analysis.
		Various measures of price dispersion were constructed, (for example, the standard deviation of prices), for each of the commodities and the time series behavior of these measures of price dispersion were analyzed.
	www.findarticles.com /p/articles/mi_go2273/is_200303/ai_n7604837 (191 words)

	SSRN-Publications and Documents That Reference 'The Law of One Price Over 700 Years' by Kenneth Froot, Michael Kim, ... (Site not responding. Last check: 2007-10-12)
		Froot, Kenneth A, Michael Kim, and Kenneth Rogoff (1995), "The law of one price over 700 years," NBER working paper W5132..
		Froot, Kenneth, Michael Kim, and Kenneth Rogoff, 1995, The law of one price over 700 years, NBER Working Paper 5132.
		The columns rep ort the p o w er of the dieren t s p eci cations of the test to detect skill for skill lev els of skil l =0.1, 0.2,.
	papers.ssrn.com /sol3/RefPointingTo.cfm?abid=225197 (214 words)

	Revisiting the Border: An Assessment of the Law of One Price Using Very Disaggregated Consumer Price Data from Federal ... (Site not responding. Last check: 2007-10-12)
		This paper reexamines the evidence for "border effects" in deviations from the law of one price, using data for consumer prices from Canadian and U.S. cities.
		The paper finds evidence of border effects both in the levels of prices and the percentage change in prices.
		Even accounting for distance between cities and relative population sizes, it was found that the absolute difference between prices in the U.S. and Canada in the data (annual from 1990 to 2002) is greater than 7 percent.
	whitepapers.zdnet.co.uk /0,39025945,60138951p-39001301q,00.htm (175 words)

	S-WoPEc: Endogenous Market Segmentation and the Law of One Price
		Abstract: To the surprise of many, price deviations between markets characterized by imperfect competition have often been little affected by lower transport costs.
		The intuition is that lower transport costs, by facilitating arbitrage, place a tighter restriction on the maximization problem and a firm is willing to take a greater cost in order to segment.
		Keywords: price discrimination; market integration; law of one price.
	swopec.hhs.se /hastef/abs/hastef0471.htm (213 words)

	Some Pitfalls in Testing the Law of One Price in Commodity Markets
		Several articles find no support for the law of one price (LOP) in commodity markets.
		A rejection of the LOP would strike at the heart of economic theory.
		Llad Phillips and John Pippenger, "Some Pitfalls in Testing the Law of One Price in Commodity Markets" (August 2, 2005).
	repositories.cdlib.org /ucsbecon/dwp/wp4-05 (188 words)

	Find in a Library: The law of one price over 700 years
		Find in a Library: The law of one price over 700 years
		The law of one price over 700 years
		WorldCat is provided by OCLC Online Computer Library Center, Inc. on behalf of its member libraries.
	worldcatlibraries.org /wcpa/ow/008ba24d47df181ea19afeb4da09e526.html (81 words)

	The Law of One Price and a Theory of the Firm (Site not responding. Last check: 2007-10-12)
		The Law of One Price and a Theory of the Firm
		Title: The Law of One Price and a Theory of the Firm
		Abstract: I use a hierarchical perspective to explain the pattern of interindustry wages and capital intensities.
	www.rje.org /abstracts/abstracts/1998/Spring_1998._pp._137_156.html (162 words)

	Camera, Gabriele: Currency Substitution and The Law of One Price (Site not responding. Last check: 2007-10-12)
		We study endogenous currency substitution in a decentralized trade environment.
		Sellers maximize profits from sales of imperfectly substitutable goods by posting prices in either one of two currencies.
		A unique symmetric equilibrium exists where goods are priced only in the local currency.
	www.nuff.ox.ac.uk /users/doornik/eswc2000/a/0513.html (182 words)

	Legal Glossary (Site not responding. Last check: 2007-10-12)
		If you need more than a definition, check out one of our resource centers for plain-English articles and products.
		Nolo's Encyclopedia of Everyday Law: Answers to Your Most Frequently Asked Legal Questions
		Find out the basics regarding consumers' rights, courts and lawsuits, debt, wills, landlords and tenants, real estate and much more.
	www.nolo.com /glossary.cfm (183 words)

	The law of one price in Scandinavian duty-free stores
		The law of one price in Scandinavian duty-free stores
		(2001), "The law of one price in Scandinavian duty-free stores", American Economic Review, pp.
		© Copyright 2003 School of Economics and Commercial Law
	www.handels.gu.se /epc/archive/00001891 (41 words)

	DIALNET: A test of the law of one price in retail banking (Site not responding. Last check: 2007-10-12)
		DIALNET: A test of the law of one price in retail banking
		Si pertenece a una biblioteca que colabora con DIALNET puede disfrutar de servicios de valor añadido
		A test of the law of one price in retail banking
	dialnet.unirioja.es /servlet/oaiart?codigo=1279083 (120 words)

	Law Of One Price - Equitrend Small Investor Financial Investment Newsletter
		Law Of One Price - Equitrend Small Investor Financial Investment Newsletter
		A rule in economics stating that any given security must have the same price regardless of what means were used to create that security.
		Sign up today for a 30-Day Free Trial!
	www.equitrend.com /glossary2066.aspx (68 words)

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	law.bepress.com /cgi/viewcontent.cgi?article=1036&context=nwwps (2283 words)

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