Decision Sciences
4 years ago

New research shows auction and dealer markets yield same equilibrium prices.

1 view
The Equivalence of Screen Based Continuous-Auction and Dealer Markets
Ian Tonks

Paper Summary

The study shows that both auction and dealer markets can reach the same prices. In dealer markets, anyone can provide liquidity by placing orders. Investors in both markets face competitive prices to trade against, and competition ensures that liquidity providers don't make extra profits.

Related papers

Economics, Econometrics and Finance
8 years ago

Limit order market not always more liquid than dealer market.

Asset Pricing
Option Pricing
Econophysics
1 view
Economics, Econometrics and Finance
4 years ago

Global investors outsmart local traders in forex market, impacting exchange rates.

Asset Pricing
Econophysics
Monetary Models
2 views
Economics, Econometrics and Finance
4 years ago

Competition vs. Information: How Trading Systems Impact Institutional Investors' Costs.

Asset Pricing
Corporate Governance
Mechanism Design
1 view