I am particularly interested in the dependence of profit on the path length (the number of intermediate currencies) and graphical models / algorithms. More specifically:
How can we model currency disequilibrium? Are the paths with more intermediate currencies more likely to be profitable?
What graph algorithms work and which don't? There seem to be contradictory statements about this. In particular, can we find all the profitable paths, or only the best path? Do the algorithms that do work require pre-specifying the number of currencies?
I will appreciate tips and reading recommendations. I have no background in finance, but my mathematical background is quite solid (PhD in physics.)