Article

Competition between Exchanges - a Research Agenda

Estelle Cantillon, and Pai-Ling Yin

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.

Reference

Estelle Cantillon, and Pai-Ling Yin, Competition between Exchanges - a Research Agenda, International Journal of Industrial Organization, vol. 29, n. 3, May 2011, pp. 329–336.

Published in

International Journal of Industrial Organization, vol. 29, n. 3, May 2011, pp. 329–336