Aitken, Michael J; Garvey, Gerald T; Swan, Peter L - In: The Journal of Business 68 (1995) 1, pp. 1-33
In adverse-selection models of security market microstructure, a market maker could enhance efficiency if he or she were willing to sustain short-term trading losses. We show that this desirable activity can be supported as a self-enforcing agreement between broker-dealers and long-lived...