Financial markets - and stock price movements in particular - are often described using simplified assumptions. However, financial markets are complex systems involving various interacting components. Agents in these markets have heterogeneous traits and differ in many respects. Among other...

This dissertation consists of three essays that uncover the origins of market frictions and their implications for the functioning of the global foreign exchange (FX) market. The first research paper speaks to the hegemony of the US dollar in FX trading. Over 85% of all FX transactions involve...