Dispersed Trading and the Prevention of Market Failure: The Case of the Copenhagen Stock Exchange

25 Pages Posted: 12 Mar 2008

See all articles by David C. Porter

David C. Porter

affiliation not provided to SSRN

Carsten Tanggaard

affiliation not provided to SSRN

Daniel G. Weaver

Rutgers Business School

Wei Yu

California State Polytechnic University, Pomona

Abstract

With augmented demands on power grids resulting in longer and larger blackouts combined with heightened concerns of terrorist attacks, trading institutions and policy makers have widened their search for systems that avoid market failure during these disturbing events. We provide insight into this issue by examining trading behaviour at the Copenhagen Stock Exchange during a major blackout. We find that although market quality declined, markets remained functional and some price discovery occurred during the blackout period suggesting that the NOREX structure of interlinked trading systems combined with widely dispersed trading locations may be a viable means of protection against market failure during massive power disruptions or terrorist attacks.

Suggested Citation

Porter, David C. and Tanggaard, Carsten and Weaver, Daniel G. and Yu, Wei, Dispersed Trading and the Prevention of Market Failure: The Case of the Copenhagen Stock Exchange. European Financial Management, Vol. 14, Issue 2, pp. 243-267, March 2008. Available at SSRN: https://ssrn.com/abstract=1104843 or http://dx.doi.org/10.1111/j.1468-036X.2007.00413.x

David C. Porter (Contact Author)

affiliation not provided to SSRN

No Address Available

Carsten Tanggaard

affiliation not provided to SSRN

Daniel G. Weaver

Rutgers Business School ( email )

94 Rockafeller Road
Piscataway, NJ 08854
United States
848.445.5644 (Phone)
732.445.2333 (Fax)

HOME PAGE: http://weaver.rutgers.edu

Wei Yu

California State Polytechnic University, Pomona ( email )

3801 W. Temple Avenue Pomona
Pomona, CA 91768
United States
909-869-2402 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
8
Abstract Views
627
PlumX Metrics