This is an extremely useful idea that I've learned just recently. In fincance, "arbitrage" means buying and selling things in different markets to take the advantage of difference in price. Like buying a toy in India for $15, and then selling it for $25 in the US.
Turns out, you can arbitrage not just products, but also information, knowledge, skill, or even human relationships.
For example, let's say you have met two amazing people who don't know each other. When you introduce them to each other, you generate a massive amount of value for both of them essentially out of nothing - you have given each of them a gift of knowing someone great.
Another example, is arbitraging information. Eliezer Yudkowsky have learned a lot about rationality and human biases from the books he has read, and then parlayed it into his blog, and later a Harry Potter fanfiction - and that has generated a huge amount of value to the people on the internet, who would never have been exposed to these ideas otherwise.
You can also arbitrage skills. That simply means applying good ideas you have learned in one field to a completely different one. I'm constantly applying the skills and ideas I've learned as a 3D artist to my programming process, and, surprisingly, the ideas I've learned from programming are making me a much better artist.
Finally, an unexpected idea that I have discovered, is that you can arbitrage fiction tropes. You can take a trope you have seen in one story, apply it to a completely different genre, and it will create a new and interesting idea. You can take a SciFi trope and set it in a fantasy world, or you can take a plot structure from a dramatic TV show and use it in your comedy script. In fact, this is how a lot of movie ideas are created.
Smart ideas are often universal. Learn a mental pattern in one field - and apply it elsewhere. Now that I got pretty good at it, every time I have an epiphany in one of my crafts, I intentionally go through each of the other fields I'm interested in and apply it there. This has helped me to generate a lot of very interesting ideas.
Voted -1 for the same reason. This is a confusing usage of the word arbitrage.
The way the word arbitrarge is actually used in economics and finance is as an _exploitable inefficiency_. Two things of the same value are selling at different values. There has to be a market, and competition, involved. This explains why arbitrage is rare: it is essentially a money pump, and we should expect money pumps to be drained quickly. This relates to the notion of _informational_ efficiency: the extent to which prices reflect information about the value of the underlying good or asset.
The Esperanto example rather relates to _productive_ efficiency: the extent to which the available resources are used to generate as much value as they can.
Here's a world where the Esperanto example is actually an arbitrage opportunity: there's a Spanish learning contest with a cash prize. All participants focus solely on learning Spanish. Anyone who uses the Esperanto-technique will outperform them, and win a prize sum larger than their opportunity cost of practicing. Then, in theory, you could keep sending proteges to the competition and win the price, charging a slice of the prize money for selling your secret learning technique. Until, of course, other people discovered this was happening, and the arbitrage disappeared as all contest participants started learning Spanish by learning Esperanto first.