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Consolidation, Fragmentation, and Market Performance

Published online by Cambridge University Press:  06 April 2009

Haim Mendelson
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Abstract

This paper studies the impact of market consolidation or fragmentation on its performance, examining four alternative models of exchange: a consolidated clearing house, fragmented clearing houses, a monopoly dealer market, and an interdealer market. The effects of the market mechanism on the expected quantity traded, the price variance faced by individual traders, the quality of market price signals, the expected gains from trade, and the exchange implementation costs are studied.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 22 , Issue 2 , June 1987 , pp. 189 - 207
Copyright
Copyright © School of Business Administration, University of Washington 1987

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References

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