000			01119nam a22001457a 4500
999			_c517972 _d517972
008			210806b ||||| |||| 00| 0 eng d
100			_aWittwer, Milena _928297
245			_aConnecting disconnected financial markets?
260			_aAmerican Economic Journal: Microeconomics
300			_a13(1), Feb, 2021: p.252-282
520			_aIn most financial markets, securities are traded in isolation. Such a disconnected market design can be inefficient if agents trade more than one security. I assess welfare effects of connecting markets by allowing orders for one security to depend on prices of other securities. I show that everyone trades identical amounts under both market structures if and only if the clearing prices are perfectly correlated or all are price-takers. Prices in disconnected markets might allow strategic traders to extract higher rents from nonstrategic traders. In expectation, connected markets generate higher welfare, but all markets become efficient as they grow large. – Reproduced
773			_aAmerican Economic Journal: Microeconomics
906			_aFINANCIAL MARKETS
942			_cAR