Why is MTGOX's Price/Bitcoin higher than most other exchanges?

Question

I've been watching BitCoins for the last few months, and noticed that MTGOX's price per bitcoin is always higher than the price per bitcoin of similar exchanges, (eg cavirtex.com, and bitstamp.com).

Why is this? And why wouldn't people just buy them at another exchange, send their bitcoin to MTGOX, and cash out for an automatic (from what I've seen) 10-15% increase in what they invested?

I know they were the most popular/liquid site for bitcoin's until just recently, but I've heard that BitStamp has surpassed them.

Answer 1

It is because it is more expensive and has delays longer and more unpredictable to get $USD out of MtGox, and because they are facing regulatory and lawsuit problems. US branch of MtGox, known as Mutuum Sigillum, may bankrupt or get more assets seized. Simply put, a dollar at MtGox is not worth as much as a dollar elsewhere. MtGox is more accessible/less risky in markets outside US where demand is greater.

There is "friction" moving money between bitcoin dealers; delays, charges, fees, etc. Arbitragers keep price differences for bitcoin fairly close to the sum of fees, but don't move until they are sure of a profit -- and the price is volatile, so they must account for risk due to the delay between selling in one place and buying in the other. Delays with MtGox are so unpredictable that arbitragers are very cautious.