The highest price ever: The great NYSE seat sale of 1928-1929 and capacity constraints

• 成果类型: Article
• 署名作者: California Institute of Technology; University of Illinois System; University of Illinois Urbana-Champaign; Rutgers University System; Rutgers University New Brunswick
• 刊物名称: JOURNAL OF ECONOMIC HISTORY
• ISSN/ISSBN: 0022-0507
• DOI: 10.1017/S0022050707000289
• 发表日期: 2007
• 页码: 705-739
• 关键词: exchange

摘要

During the 1920s the New York Stock Exchange's position as the dominant American exchange was eroding. Costs to customers, measured as bid-ask spreads, spiked when surging inflows of orders collided with the constraint created by a fixed number of brokers. The NYSE's management proposed and the membership approved a 25 percent increase in the number of seats by issuing a quarter-seat dividend to all members. An event study reveals that the aggregate value of the NYSE rose in anticipation of improved competitiveness. These expectations were justified as bid-ask spreads became less sensitive to peak volume days.