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I have to disagree. In my experience I feel like the whore market is one of the least well arbitraged markets in the world.
One limit to arbitrage would be that market participants have a limited shelf-life to figure out the market and outsourcing to management (pimping) is much enforced criminally. And sharing information and tactics online seems more difficult than other markets.
I am going to assume the very best girls don’t even become whores. Steve Jobs wife would never become a whore because Stanford MBA and attractive makes it trivially easy for her to marry well. So I feel the supply side of the whore market can’t be power law because the far right tail just does marriage. Depending on your taste the far right tail of females are Tom Brady or Steve Jobs wives.
And then you have Miami. Where the strip clubs are basically brothels and like $500 gets you a girl hotter than these SF escorts. The price in Miami really is 5-10% of San Francisco. If you believe these girls and their $4k/hour claims.
So my guess is this is much more a story of market inefficiency. Some girls probably did find a magic marketing technique and location. And few hot girls want to live in San Francisco. So the high price is a lack of knowledge by other whores on marketing and a huge premium for having to live in San Francisco.
I believe a lot of this is just search costs. Whores don’t know how to market to tech nerds. Tech nerds don’t know how to find whores. The ones that know how to connect the two make a lot.
Listen I get all this, this all makes sense to me. What I'm saying is that the subset of women who are likely to become escorts don't get this and it doesn't make sense to them. Start talking to them about arbitrage and they'll fall asleep before you finish, in either sense.
You don't have to be a genius at economics to understand "Less hot girls are making more money than you in escorting while doing less. If you want to make more money, you just need move to where there are more rich, lonely, awkward guys." While I don't finish that fast, I'm pretty sure you don't need to elaborate much more for this to be within intellectual reach of anyone with an IQ of 95. Probably 90.
And I think the market situation tells us, clearly, that women with high enough IQ to comprehend and execute that plan, while also being willing to be prostitutes and prostitutes to nerds, are in short supply.
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