In this paper, the authors study the changes in liquidity following the introduction of a new electronic limit order market when, prior to its introduction, trading is centralized in a single limit order market. They also study how automation of routing decisions and trading fees affect the...

Market makers on financial markets often act as competitiors and step into cooperations with each other at the same time. Primarily, they quote prices for investors, thus providing liquidity on the customer market. But they also trade with each other in order to reduce their inventory risk. The...

Market makers on financial markets often act as competitiors and step into cooperations with each other at the same time. Primarily, they quote prices for investors, thus providing liquidity on the customer market. But they also trade with each other in order to reduce their inventory risk. The...

We show that for any market-clearing price, average profits in a symmetric industry cannot exceed the individual profits from the Walrasian output. This immediately implies that a firm itself can guarantee to beat the market by producing the Walrasian output. This property clarifies and...