01396nam a22001457a 4500 525942 525942 240426b ||||| |||| 00| 0 eng d Rostek, Marzena and Yoon, Ji Hee 51887 Innovation in decentralized markets: Technology versus synthetic products American Economic Journal: Microeconomics 16(1), Feb, 2024: p.63-109 Advances in market-clearing technology for multiple assets and synthetic products present alternative ways to leverage complementarities and substitutabilities in asset payoffs. This paper compares their equilibrium and welfare effects. In competitive markets, either instrument can mimic the efficient design. When traders have price impact, however, synthetic products and market-clearing technology provide separate instruments for impacting markets' performance and can generate synergies or trade-offs. Neither instrument can generally reproduce the other's payoffs state by state. Moreover, innovation in market clearing renders additional synthetic products nonredundant. Our analysis points to the advantages of each type of innovation while also exposing potential risks.- Reproduced https://www.aeaweb.org/articles?id=10.1257/mic.20220138#:~:text=Abstract,can%20mimic%20the%20efficient%20design. American Economic Journal: Microeconomics INNOVATION AR 0 0 ddc 0 0 400996 IIPA IIPA 2024-04-26 16(1), Feb, 2024: p.63-109 AR131735 2024-04-26 AR