Assuming a particular price process, it was shown by Gatheral that a model that combines nonlinear price impact with exponential decay of market impact admits price manipulation, an undesirable feature that should lead to rejection of the model. Subsequently, Alfonsi and Schied proved that their model of the order book which has nonlinear market impact and exponential resilience, is free of price manipulation. In this paper, we show how these at-first-sight incompatible results are in reality pe
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