The current financial crisis is a crisis of theory as well. The dominant theory of financial markets, the efficient market hypothesis (EMH), states that in an efficient market the price of a financial asset reflects publicly available information about that asset. Competing theories, such as...

The current financial crisis is a crisis of theory as well. The dominant theory of financial markets, the efficient market hypothesis (EMH), states that in an efficient market the price of a financial asset reflects publicly available information about that asset. Competing theories, such as...

The efficient markets hypothesis argues that the price of a financial asset reflects available information about that asset. Competing theories argue that other factors, including investor behavior, can cause asset prices to diverge from the efficient price leading to “bubbles.” We argue...

Regulation NMS, announced in June 2005 by the SEC, was intended to generate competition with the New York Stock Exchange (NYSE). The NYSE had for many decades maintained a near monopoly on the trading of securities initially listed on the exchange. Reg. NMS allowed trades on electronic...

This spring the New York Stock Exchange, Inc. (NYSE) completed an historic restructuring. On March 7, 2006, the NYSE completed its merger with Archipelago Holdings Inc. (Archipelago), a publicly traded electronic trading platform. As a result, the old NYSE itself will become the New York Stock...

Volatile events in the stock market such as the 2010 Flash Crash have sparked concern that financial markets are "rigged" in favor of trading firms that use high frequency trading ("HFT") systems. We analyze a regulatory change implemented by the SEC in 2007 by examining its effect on a key...

This spring the New York Stock Exchange, Inc. (NYSE) completed an historic restructuring. On March 7, 2006, the NYSE completed its merger with Archipelago Holdings Inc. (Archipelago), a publicly traded electronic trading platform. As a result, the old NYSE itself will become the New York Stock...