Although research on limits to arbitrage is far from played out, it is fair to say that a broad consensus is emerging with respect to the key ideas and modeling ingredients. This should not be too surprising, given that the relevant tools all come from neoclassical microeconomics: arbitrageurs can be modeled as fully rational, with no need to appeal to any behavioral or psychological biases. For example, the work on the liquidity constraints associated with delegated arbitrage can be thought of as embedding familiar theories from corporate finance into an asset-pricing framework. .
