We study the evolution of trading in a market-maker trading system (SPAD) introduced to the Prague Stock Exchange in 1998. We find that the new system succeeded in increasing the transparency of the market, improved the price discovery function of the exchange, and that investors have benefited from lowered spreads. From this viewpoint, it may be an example for other markets where lack of trans...

A variety of transparency rules and government regulations as well as risk management policies in Bulgaria set the basis for the establishment of the young Bulgarian Stock Exchange (BSE) the way it exists today. Similar to other Eastern European countries, Bulgaria started its mass privatization process and re-established the Bulgarian Stock Exchange Market in 1995. By the end of 1999 the Bulga...

This chapter explores the private and social desirability of information transparency of a business-to-business (B2B) electronic market that provides an online platform for information transmission. The abundance of transaction data available on the Internet tends to make information more transparent in B2B electronic markets. In such a transparent environment, it becomes easier for firms to ob...

We study pre-trade transparency by looking at the introduction of NYSE’s OpenBook service that provides limit-order book information to traders off the exchange floor. We find that traders attempt to manage limit-order exposure: They submit smaller orders and cancel orders faster. Specialists’ participation rate and the depth they add to the quote decline. Liquidity increases in that the price ...

We analyze how market design influences the bidding behavior in multiunit procurement auctions where suppliers have uncertain costs and are uncertain about the availability of production units, as in wholesale electricity markets. We find that the competitiveness of market outcomes improves with increased market transparency. We identify circumstances where the auctioneer prefers uniform to dis...