The Automation of Capital Markets

Abstract

The aim of the research project EMIWA (elektronische Markte und institutioneller Wandel) is to achieve a better understanding of technology‐induced changes of markets. For this purpose, the capital market and its exchanges are studied as one of the most prominent installations of electronic markets. A noticeable gap between the postulated rationalization potential of computer exchanges on the one hand and the existing technological support on the other can be observed. Reasons for this installation gap are supplied and conclusions are drawn for a more differentiated discussion of the impact of information technology on the market as a coordination mechanism.

Information and Decision Sciences

“…Despite their potential impact on transparency, technological breakthroughs have not necessarily led to increases in transparency (Garbade and Silber, 1976;Picot et al, 1995;Tapscott and Ticoll, 2003). Consider the U.S. financial markets after the invention of the telegraph in the mid-1800s.…”

Where the Action Is: Internet Stock Trading as Edgework

“…The theater of trading enacted on trading floors in New York, Frankfurt, and Tokyo disappears behind the screen (Abolafia, 1996; Picot, Bortenlaenger, & Roehrl, 1997). Yet, the screen does not conceal material space as much as it overexposes it in the form of a 24‐hour live broadcast, bringing “a geographically dispersed and invisible market close to participants, rendering it interactionally or response‐present” (Knorr Cetina & Bruegger, 2002b, p. 163).…”

Transaction automation on the internet: open electronic markets, private electronic markets and supply network solutions

“…These include stock acquisitions and sales through the internet (see Picot et al [15], Konana et al [16,17]), some services in the tourism sector (see Kaukal et al [18]), and acquisition of CDs or songs directly (see Daniel and Klimis [19] and Rao [20]). …”