The Information Role Of Upstairs And Downstairs Trading
Much of economic theory is concerned with understanding price determination in competitive markets. Such theories assume that all individuals continuously participate in one giant market where they can express their demands for all assets simultaneously as a function of a giant price vector. This assumption of simultaneous and continuous participation in all markets is inconsistent with two important facts: First, it is costly for an individual or an institution to continuously express demands in any single market, and second it is simply impossible to trade in all markets simultaneously. These two facts create a need for intermediaries. Much is known about the role of intermediaries as principals who add liquidity to markets by trading on their own account. However, far less is known about the informational role of intermediaries. In this paper, we will analyze the consequences of the fact that intermediaries play a fundamental role as repositories of information.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1990|
|Contact details of provider:|| Postal: 3404 Steinberg Hall-Dietrich Hall, 3620 Locust Walk, Philadelphia, PA 19104-6367|
Web page: http://finance.wharton.upenn.edu/weiss/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:pennif:22-90. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.