discovery. Our findings provide support for the theory of limits to arbitrage …-ask spread on both the spot and futures markets, which induces higher arbitrage risk and trading costs during high sentiment …

restricted entry in arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the … behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In the … presence of market power, we show that full arbitrage is not necessarily welfare-enhancing, reducing consumer costs but …

and limited arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the … behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In our … setting, we show that full arbitrage is not necessarily welfare-enhancing in the presence of market power, reducing consumer …

and limited arbitrage. Our theory predicts that these two elements can generate a systematic price premium. We test the … behavior are consistent with the model. Finally, we quantify the welfare effects of arbitrage using a structural model. In our … setting, we show that full arbitrage is not necessarily welfare-enhancing in the presence of market power, reducing consumer …