Innovation in Decentralized Markets

29 Pages Posted: 14 Jul 2020

See all articles by Marzena J. Rostek

Marzena J. Rostek

University of Wisconsin - Madison

Ji Hee Yoon

University College London - Department of Economics

Date Written: June 19, 2020

Abstract

This paper examines security design in imperfectly competitive markets in which assets clear separately rather than jointly. Derivatives are generally nonredundant even with zero asset supply. We characterize the scope for introducing nonredundant derivatives and examine the welfare effects of new assets. We compare welfare effects of derivatives vs. innovation in trading technology.

Keywords: Imperfect competition, Decentralized market, Uniform-price auction, Liquidity, Price impact, Efficiency, Derivatives, Security design

JEL Classification: D47, D53, G11, G12

Suggested Citation

Rostek, Marzena J. and Yoon, Ji Hee, Innovation in Decentralized Markets (June 19, 2020). Available at SSRN: https://ssrn.com/abstract=3631479 or http://dx.doi.org/10.2139/ssrn.3631479

Marzena J. Rostek

University of Wisconsin - Madison ( email )

1180 Observatory Drive
Madison, WI 53703
United States
(608) 262-6723 (Phone)
(608) 262-2033 (Fax)

HOME PAGE: http://www.ssc.wisc.edu/~mrostek

Ji Hee Yoon (Contact Author)

University College London - Department of Economics ( email )

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
29
Abstract Views
147
PlumX Metrics