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Network Economics with Application to Finance Author info | Abstract | Publisher info | Download info | Related research | Statistics Nicholas Economides () (New York University, NY 10012-1126., Stern School of Business)
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Networks are common in financial services. Perfect competition does not decentralize optimality on a network, and coordination of participants expectations and investments is crucial for success. Financial exchange networks exhibit two kinds of externalities: liquidity enhancement by size expansion, and underpriced provision of market price information to outside rivals. We discuss the interaction of these externalities in alternative exchange network structures.
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Iftekhar Hasan & Heiko Schmiedel, 2004.
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NBER Working Papers
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"The Economics of Networks ,"
Brazilian Electronic Journal of Economics ,
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[Downloadable!]
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