Business, Management and Accounting
4 years ago

Fragmented markets lead to higher volatility and inefficient pricing, study finds.

SSRN Electronic Journal
Consolidation, Fragmentation, and the Disclosure of Trading Information
Ananth Madhavan

Paper Summary

Fragmented markets may not naturally consolidate unless trading information is disclosed. Non-disclosure benefits traders and dealers but can lead to inefficient pricing. Fragmentation can disrupt bid-ask spreads and increase price volatility.

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