Douglas T. Breeden coauthored the extraction of state-contingent prices from option pricing with Robert H. Litzenberger. For sufficiently regular call prices across strikes, their second strike derivative identifies a discounted state-price density. The construction makes an entire option-price curve informative about the market's pricing of future outcomes, rather than only one payoff.[ref]
Prices of State-Contingent Claims Implicit in Option Prices by Douglas T. Breeden and Robert H. Litzenberger. Section II, pages 625–627 and equation (2)
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