Sequences of Arbitrages
Victor Kozyakin, Brian O'Callaghan, Alexei Pokrovskii
TL;DR
This paper explores the properties of arbitrage sequences in economics and finance, providing a linear algebra and geometric framework to better understand complex arbitrage processes and their implications.
Contribution
It introduces a linear algebra and geometric interpretation of arbitrage sequences, enhancing understanding of complex economic models.
Findings
Linear algebra reformulation of arbitrage sequences
Geometric interpretation linked to asynchronous systems
Potential for improved modeling of economic arbitrage processes
Abstract
The goal of this article is to understand some interesting features of sequences of arbitrage operations, which look relevant to various processes in Economics and Finances. In the second part of the paper, analysis of sequences of arbitrages is reformulated in the linear algebra terms. This admits an elegant geometric interpretation of the problems under consideration linked to the asynchronous systems theory. We feel that this interpretation will be useful in understanding more complicated, and more realistic, mathematical models in economics.
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Taxonomy
TopicsEconomic theories and models · Stochastic processes and financial applications · Mathematical and Theoretical Analysis