Competition in Exchange Markets Leads to Increased Welfare for Consumers
The article explores how competition between different exchanges affects market entry and overall welfare. The researchers analyze how entry decisions are influenced by the level of competition among exchanges. They find that increased competition can lead to more entry into the market, which can benefit consumers by providing more choices and potentially lower prices. However, excessive competition may also lead to inefficiencies and reduced overall welfare. The study highlights the complex relationship between exchange competition, market entry, and consumer welfare.