The Iowa Electronic Markets are small, real-money financial markets designed to aggregate information about future events. The market microstructure of these markets is studied and a market making model is developed to provide liquidity for one set of securities offered by this exchange. A computer program was created to employ the market making model and profit from the market’s inefficiencies...

E-marketplaces present a business-to-business (B2B) trading environment in which firms can benefit from increased choice among trading partners, and other efficiencies gained through electronic trading. B2B e-marketplaces have only recently emerged in New Zealand; however, there is already doubt whether predicted benefits are being realized. This study draws on the Tornatzky and Fleischer (1990...

In this study, we address the question of how the degree of business model innovation affects the survival of new firms. We present a newly constructed data set of 129 new firms that launched electronic trading platforms in the US bond market between 1995 and 2004 following the advent of Internet technology. We analyze the founding and survival of these new firms during the period of our study....

nologies, particularly the Internet, have profoundly changed the dynamics of financial markets. More people are trading online through the Web instead of using full-service brokerages. According to Jupiter Communications, the $415 billion online brokerage assets in 1998 will grow by more than sevenfold to $3 trillion in 2003 [4]. Investors Combining new technology with established financial mar...

Investors prefer to hold diversified combinations of assets. We take this dictum seriously and propose a bundle trading mechanism that would allow investors to trade diverse combinations of assets. The portfolio trading market is designed as an order-driven process where traders submit sealed orders. A mathematical algorithm is used to continuously match orders listed in a closed limit order bo...

This study examines the impact of migration to electronic trading on the relative informational efficiency between an index futures contract and the underlying cash index. The recent move to electronic trading of the Hong Kong Hang Seng Index futures contract provides an opportunity to study how the change affects the effective bid and ask spread in the futures market and the dynamic relationsh...

At the University of Arizona, electronic trading (now commonly known as e-commerce) in the experimental laboratory began in 1976 when Arlington Williams conducted the initial experiments testing the first electronic “double-auction” trading system, which he had programmed on the Plato operating system. The term “double auction” refers to the oral bid-ask sequential trading system used since the...

In the past decade traditional market structures have been drastically revolutionized, creating new potential for electronic trading. The driving forces are changes in trading behavior, advances in technology and new regulation. Traditional exchanges are challenged by new electronic trading platforms competing on the basis of price, cost, speed and efficiency. As trading has become more fragmen...