What is an Exchange?

Lee, Ruben

doi:10.1093/acprof:oso/9780198297048.001.0001

Cited by 11 publications

(16 citation statements)

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“…In each period, a continuum of investors (indexed by i 2 [0; 1]) arrives in the market. 7 See Lee (2000), Chapter 6, for a detailed description of the market for price information and pricing policies followed by exchanges. For a description of this market in the U.S., see "Report of the advisory committee on market information: a blueprint for responsible change," SEC, 2001.…”

Section: Modelmentioning

confidence: 99%

“…This bene…t is captured by the speculative component of investors'payo¤s. According to (20) and (21) this component increases with the pricing error, Var[v p n ] because large pricing errors mean that the investor can buy (resp. sell) the asset at large discount (resp.…”

Section: The Ticker Externalitymentioning

confidence: 99%

“…Thus, in our model, ticker information is valuable only for speculative purposes, and not for hedging. Using equations (20) and (21), it is immediate that…”

Section: The Ticker Externalitymentioning

confidence: 99%

“…We now study the case in which the market for price information is organized by a for-pro…t exchange. 20 The for-pro…t exchange charges two fees: a fee for distributing ticker information ( n ), and an entry fee (E n ), which…”

Section: The Market For Price Information and Welfarementioning

confidence: 99%

“…As there is a one-to-one relationship between the equilibrium proportion of insiders and the fee charged for ticker information, the solution of this problem can be found by …rst solving 20 Major exchanges (e.g., NYSE-Euronext, Nasdaq, London Stock Exchange, Chicago Mercantile Exchange) are now for-pro…t. See Aggarwal and Dahiya (2006) for a survey of exchanges'governances around the world.…”

Section: The Market For Price Information and Welfarementioning

confidence: 99%

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Insiders-Outsiders, Transparency, and the Value of the Ticker

Cespa

Foucault

2008

SSRN Journal

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We consider a multi-period rational expectations model in which risk-averse investors di¤er in their information on past transaction prices (the ticker). Some investors (insiders) observe prices in real-time whereas other investors (outsiders) observe prices with a delay. As prices are informative about the asset payo¤, insiders get a strictly larger expected utility than outsiders. Yet, information acquisition by one investor exerts a negative externality on other investors. Thus, investors'average welfare is maximal when access to price information is rationed. We show that a market for price information can implement the fraction of insiders that maximizes investors'average welfare. This market features a high price to curb excessive acquisition of ticker information.We also show that informational e¢ ciency is greater when the dissemination of ticker information is broader and more timely.

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Section: Modelmentioning

confidence: 99%

Section: The Ticker Externalitymentioning

confidence: 99%

“…Thus, in our model, ticker information is valuable only for speculative purposes, and not for hedging. Using equations (20) and (21), it is immediate that…”

Section: The Ticker Externalitymentioning

confidence: 99%

Section: The Market For Price Information and Welfarementioning

confidence: 99%

Section: The Market For Price Information and Welfarementioning

confidence: 99%

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Insiders-Outsiders, Transparency, and the Value of the Ticker

Cespa

Foucault

2008

SSRN Journal

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Stock exchange industry in UAE

Paltrinieri

2015

International Journal of Emerging Markets

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Purpose – The purpose of this paper is to give an overview of UAE Stock Exchange industry. In particular this paper aims to assess a potential merger between Dubai Financial Markets-Nasdaq-Dubai and Abu Dhabi Securities Exchange, evaluating risks, rewards, policy and business implications. Design/methodology/approach – The paper presents a theoretical framework and a literature review of M & As in financial sector. It then carries out a case study on a potential merger between the UAE Stock Exchanges and a discussion on the implications for the actors involved. Findings – The contraction both in market capitalization and in trading value in the three UAE Stock Exchanges caused by subprime financial crisis and market fragmentation could be a key factors in implementing a merger between them. Because of high-fixed costs and trading platform, a single consolidated stock exchange may benefit from significant economies of scale, particularly network effects, and economies of scope. Practical implications – This paper could be useful to Security and Commodity Authority, in order to support a merger between Dubai and Abu Dhabi Stock Exchange. Given that UAE capital market regulator has tried to improve efficiency in UAE stock market over the last years, a merger between UAE Stock Exchanges could have positive effects on overall efficiency. Originality/value – It is the first paper that analyze UAE Stock Exchange industry. It is the first study that focusses on a potential merger between emerging markets’ stock exchanges. It is one of the first contributions that relates stock exchanges belonging to emerging and developed countries.

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Competition and Integration among Stock Exchanges in Europe: Network Effects, Implicit Mergers and Remote Access

Noia

2001

Euro Fin Management

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The economic theory of network externalities and a simple-game theoretical framework are used to explore the issue of competition among stock exchanges and the possibility of consolidation in the European stock-exchange industry. The paper shows the existence of equilibria where exchanges may decide, even unilaterally, to achieve full compatibility through implicit mergers and remote access, specialising only in trading or listing services. Thus the consolidation of European exchanges into one may occur with a welfare-efficient outcome or with a lock-in to a Paretoinferior equilibrium, due to the network externalities and the different starting points of the various exchanges.`Implicit mergers' among exchanges together with remote access are always weakly (in half of the cases, strictly) more efficient than the actual competition. This finding also sheds light on the existence and efficacy, of ATS and rating agencies, which can be viewed respectfully as exchanges specialising in trading and listing services.

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What is an Exchange?

Cited by 11 publications

References 0 publications

Insiders-Outsiders, Transparency, and the Value of the Ticker

Insiders-Outsiders, Transparency, and the Value of the Ticker

Stock exchange industry in UAE

Competition and Integration among Stock Exchanges in Europe: Network Effects, Implicit Mergers and Remote Access

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