kaal:claim:4033886-010

Arbitrage trading emerges in crypto markets because of information asymmetries across exchanges, which arise from imperfect disclosure, and the resulting decline in market efficiency is a key indicator of an inefficient market.

Source quote, verbatim

The reason arbitrage trading starts to happen is because of asymmetries of information across the different exchanges. These asymmetries can happen as a result of imperfect disclosures or incite on whether a company has a willingness to take on debt.

From

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022), II.1.a Market Arbitrage Issues, p. 6
https://ssrn.com/abstract=4033886 · source PDF

Cite as

Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

Holds when

multiple exchanges trading the same asset

Classification

mechanismsupport: arguedfailure: cross exchange information asymmetryfamily: information-asymmetrydisclosureeconomicsdefi

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