The Impact of Market Design and Institutional Features on World Equity Market Performance: The Relation Between Market Design

Westerholm, Swan, and Liu look at how market design impacts how the market operates. That is, there is a tradeoff between transaction costs and volatility. Having dealers available to trade continually increases expenses, which in turn lead to larger spreads (transaction costs) for these so-called continuous dealer markets. On the other hand in return for these larger spreads, the dealers do help … [ Read more ]