Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, December 15, 2011

Competition between Exchanges: A research Agenda

Posted by D. Daniel Sokol

Estelle Cantillon and Pai-Ling Yin provide Competition between Exchanges: A research Agenda.

ABSTRACT: This paper describes open research questions related to the competition and market structure of financial exchanges and argues that only a combination of industrial organization and finance can satisfactorily attack these questions. Two examples are discussed to illustrate how the combination of these two approaches can significantly enrich the analysis: the “network externality puzzle”, which refers to the question of why trading for the same security is often split across trading venues, and the impact of the multi-sided character of financial exchanges on pricing and profitability.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/12/competition-between-exchanges-a-research-agenda.html

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