Benchmarks in Search Markets
We characterize the price-transparency role of benchmarks in over-the-counter markets. A benchmark can, under conditions, raise social surplus by increasing the volume of beneficial trade, facilitating more efficient matching between dealers and customers, and reducing search costs. Although the market transparency promoted by benchmarks reduces dealers' profit margins, dealers may nonetheless introduce a benchmark to encourage greater market participation by investors. Low-cost dealers may also introduce a benchmark to increase their market share relative to high-cost dealers. We construct a revelation mechanism that maximizes welfare subject to search frictions, and show conditions under which it coincides with announcing the benchmark
Year of publication: |
2014
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Authors: | Duffie, Darrell |
Other Persons: | Dworczak, Piotr (contributor) ; Zhu, Haoxiang (contributor) |
Publisher: |
[2014]: [S.l.] : SSRN |
Subject: | Suchtheorie | Search theory | Benchmarking | OTC-Handel | OTC market | Transparenz | Transparency | Kapitalmarkttheorie | Financial economics | Effizienzmarkthypothese | Efficient market hypothesis | Maßzahl | Statistical measures |
Saved in:
freely available
Extent: | 1 Online-Ressource (62 p) |
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Series: | NBER Working Paper ; No. w20620 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 2014 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013044980