The “Law” of One Price: Implausible, Yet Consequential

  title={The “Law” of One Price: Implausible, Yet Consequential},
  author={Salim Rashid},
  journal={The Quarterly Journal of Austrian Economics},
  • S. Rashid
  • Published 14 June 2007
  • Economics
  • The Quarterly Journal of Austrian Economics
The law of one price (hereafter LoP) is one of the most basic laws of economics and yet it is a law observed in the breach. That a given commodity can have only one price, except for the briefest of disequilbrium transitions, seems to be almost an axiom. Economists are bent on considering their subject to be empirically based, yet the most elementary of laws seems to defy empirical confirmation. Would it not be wise to simply admit that economics cannot do without some a priori beliefs? Why has… 
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