To understand whether and how pre-trade transparency would affect over-the-counter markets, we construct a search model and test our model implications in corporate bond markets. Based on our search model, we argue that the increase in pre-trade information, which refines traders’ information sets, enhances traders’ bargaining positions relative to dealers’. Thus, traders’ transaction costs mea...

Characteristics associated with West African women traders often hinge on their resilience, ingenuity and savvy business practices under precarious economic conditions and changing ecologies. Moreover, traders are defined, identified and classified by their trade and the commodities associated with their trading practice. However, a social analysis and ethnography of trading practices challenge...

Milton Friedman argued that irrational traders will consistently lose money, won’t survive and, therefore, cannot influence long run equilibrium asset prices. Since his work, survival and price influence have been assumed to be the same. Often partial equilibrium analysis has been relied upon to examine the survival of irrational traders and to make inferences on their influence on prices. In t...

We provide an explanation for the explosive growth in the popularity of Stock Index Futures contracts. In our economy there are three broad classes of traders that place orders with a competitive market maker that sets a bid-ask spread arising from adverse selection. Informed traders trade on the basis of their private information about the value of particular securities. Liquidity traders trad...

Tracking the volume of keywords in Internet searches, message boards, or Tweets has provided an alternative for following or predicting associations between popular interest or disease incidences. Here, we extend that research by examining the role of e-communications among day traders and their collective understanding of the market. Our study introduces a general method that focuses on bundle...

Trading in security markets is delegated. We study the “efficient markets” paradigm in the context of such agency relations. Principal-investors want to monitor and compensate their agent-traders using market security prices in “mark-to-market” contracts. This introduces an externality because security prices are informative only insofar as the agent-traders of other principal-investors have an...

the aim of this study is to find the effect of trader’s biorhythmic cycles on their perceptual decisions in tehran stock exchange. according to author’s point of view, decision making is one of the major factors of management skills, and in some cases, it is equivalent of management (simon’s point of view). also considering this fact that the knowledge of psychological factors and it’s effects ...

Our aim in this paper is to look at graph-theoretic and coalition-formation approaches to the development of exchange networks among spatially separated traders. In particular, we shall show: (1) That decentralized trading structures involving bilateral trading with left-hand and righthand neighbors in a connected ring can, for a certain specified spatial arrangement of traders, be more efficie...

Stylized facts on the increased trading volume around public announcements in various financial markets give the impression that public information releases increase disagreement among traders. However, it is widespread opinion in the economic literature that under Bayesian updating and common priors, public information cannot cause divergence of opinion. We show that this is true only under sp...

We compare the behaviour of students and professional traders from an influential German bank in an experiment involving financial options. The arbitrage free option price is independent of the probability distribution of the underlying asset. The experimental data uncover a probability dependent option valuation of the students, however, they learn to exploit more arbitrage as they gain experi...