The limits of multi-dealer platforms

• 成果类型: Article
• 署名作者: Wang, Chaojun
• 署名单位: University of Pennsylvania
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2023.05.005
• 发表日期: 2023
• 页码: 434-450
• 关键词: Over-the-counter; Multi -dealer platforms; Request for quote; Pre -trade transparency

摘要

On many important multi-dealer platforms, customers mostly request quotes from very few dealers. I build a model of multi-dealer platforms, where dealers strategically choose to respond to or ignore a request. If the customer contacts more dealers, each dealer re-sponds with a lower probability and offers a stochastically worse price when responding. Dealers' strategic avoidance of competition overturns the customer's benefit from poten-tially receiving more quotes, worsening her best-overall price. In equilibrium, the customer contacts only two dealers. Multi-dealer platforms have limited ability to promote price competition: No design of information disclosure can improve the customer's payoff above this outcome.& COPY; 2023 Elsevier B.V. All rights reserved.