Exchange Competition, Entry, and Welfare

• 成果类型: Article
• 署名作者: Cespa, Giovanni; Vives, Xavier
• 署名单位: University of Navarra; IESE Business School
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab101
• 发表日期: 2022
• 页码: 2570
• 关键词: price-competition; MARKET; slow; INFORMATION; liquidity; RISK

摘要

We assess the consequences for market quality and welfare of different entry regimes and exchange pricing policies. To do so, we integrate a microstructure model with a free-entry, exchange competition model where exchanges have market power in technological services. Free-entry delivers superior liquidity and welfare outcomes vis-a-vis an unregulated monopoly, but entry can be excessive or insufficient. Depending on the extent of the monopolist's technological services undersupply compared to the first best, a planner can achieve a higher welfare controlling entry or platform fees. Review of Financial Studies, forthcoming