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dc.contributor.authorDugast, Jérôme
dc.contributor.authorUslu, Semih
dc.contributor.authorWeil, Pierre-Olivier
dc.date.accessioned2019-04-19T09:51:54Z
dc.date.available2019-04-19T09:51:54Z
dc.date.issued2018
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/18707
dc.language.isoenen
dc.subjectover the counteren
dc.subjectmarketen
dc.subjectinvestementsen
dc.subjectpayoffen
dc.subject.ddc658.8en
dc.subject.classificationjelD.D8.D85en
dc.subject.classificationjelD.D5.D53en
dc.subject.classificationjelG.G2.G23en
dc.titlePlatform Trading with an OTC Market Fringeen
dc.typeCommunication / Conférence
dc.contributor.editoruniversityotherUniversity of Luxembourg;Luxembourg
dc.contributor.editoruniversityotherJohns Hopkins University;United States
dc.description.abstractenWe study the privately and socially optimal participation of investors in a centralizedplatform or in an over-the-counter (OTC) market. Investors incur costs to trade in theplatform, in the OTC market, or in both at the same time. Investors differ from eachother in risk-sharing needs and OTC market trading capacities. We show that investorswith low risk-sharing needs and large trading capacities endogenously emerge as OTCintermediaries, and have the strongest private incentives to enter the OTC market vs. thetrading platform. Investors with strong risk-sharing needs and low trading capacities endogenously emerge as OTC customers, and have the weakest private incentive to enterthe OTC market vs. the trading platform. Turning to social welfare, we provide twonecessary conditions for customers’ private incentives to be excessively large relative totheir social contribution. Mandating or subsidizing trade in a centralized venue can bewelfare improving only if these conditions are satisfied. First, investors must differ mostlyin terms of OTC trading capacities. Second, participation costs must induce exclusiveparticipation decisions. Based on the empirical trading patterns generated by closed-formexamples of our model, we argue that the real-world OTC markets might satisfy thec onditions under which mandating or subsidizing centralized trade is welfare improving.en
dc.relation.ispartofdate2018
dc.contributor.countryeditoruniversityotherUNITED STATES
dc.subject.ddclabelÉtudes et analyses des marchésen
dc.relation.conftitleNorthen Finance Association (NFA) Conferenceen
dc.relation.confdate2018-09
dc.relation.confcityCharlevoixen
dc.relation.confcountryCanadaen
dc.relation.forthcomingnonen
dc.description.ssrncandidatenonen
dc.description.halcandidateouien
dc.description.readershiprechercheen
dc.description.audienceInternationalen
dc.relation.Isversionofjnlpeerreviewednonen
dc.relation.Isversionofjnlpeerreviewednonen
dc.date.updated2019-03-26T15:57:20Z
hal.person.labIds
hal.person.labIds
hal.person.labIds17255
hal.identifierhal-02104107*


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