search query: @indexterm MICROMARKETING / total: 10
reference: 4 / 10
| Author: | Bloomfield, R. O'Hara, M. |
| Title: | Does order preferencing matter? |
| Journal: | Journal of Financial Economics
1998 : OCT, VOL. 50: 1, p. 3-37 |
| Index terms: | MICROMARKETING FINANCIAL MARKET TRADING PREFERENCES |
| Freeterms: | NASDAQ |
| Language: | eng |
| Abstract: | The authors study how order preferencing affects the competitiveness and efficiency laboratory financial markets. They operationalize preferencing by allowing some dealers to execute a portion of the order flow by matching the most favorable quotes available. Increasing the proportion of order flow by matching the most favorable quotes available. Increasing the proportion of oder flow that is preferenced can increase bid-ask spreads, reduce the informational efficiency of prices, and benefit dealers at the expense of liquidity traders. Preferences has none of these effects, when two or more dealers are not receiving preferencing orders. Preferencing may degrade market performance if preferencing arrangements affect all, or virtually all, dealers. |
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