While monitoring borrowers, a bank obtains private information about its customers, giving the bank an informational advantage in the production of subsequent services. Competing theories exist on the way banks use this advantage in the pricing of subsequent services to the customer. If moral...

A fundamental question in financial markets is whether a diversified group of market makers freely competing for orders (NASDAQ) results in as liquid a market as a centralized exchange using specialists subject to systematic monitoring (NYSE). Prior research, theoretical and empirical, conflicts...

Deregulation of common stock brokerage commissions occurred in the United States on 1 May 1975, when the Securities and Exchange Commission prohibited the New York Stock Exchange from setting minimum brokerage rates for member firms. Prior to this time, brokerage charges for common stock...

The bid premium acquiring companies offer for target company shares may be expected to be a positive function of potential acquisition-related benefits and a negatie function of the bargaining power of the bidder. A bid premium model using debt, working capital, type of combination,...

An examination of approximately 28,000 institutional trades over five post-Mayday quarters indicates that security price and liquidity are important determinants of commissions. High priced stocks, being more liquid, are generally less costly to trade than low priced stocks. Possible inventory...