A Theory of Stock Exchange Competition and Innovation: Will the Market Fix the Market?
研究证券交易所如何竞争以及这种竞争如何影响市场设计创新的激励，发现交易所从出售速度中获取租金，导致低效市场设计持续存在，并讨论政策含义。
Will stock exchanges innovate to address latency arbitrage and the arms race for speed? This paper models how exchanges compete in the modern electronic era and how this shapes incentives for market-design innovation. In the status quo, exchange trading fees are competitive, but exchanges earn economic rents from selling speed. These rents create a wedge between private and social incentives to innovate and support the persistence of an inefficient market design in equilibrium of a market-design adoption game. We discuss implications for policy and insights for the literatures on market design, innovation, and platforms.