Fragmentation in trader preferences among multiple markets: Market coexistence versus single market dominance

Aleksandra Alorić, Robin Nicole & Peter Sollich
Technological advancement has lead to an increase in number and type of trading venues and diversification of goods traded. These changes have re-emphasized the importance of understanding the effects of market competition: does proliferation of trading venues and increased competition lead to dominance of a single market or coexistence of multiple markets? In this paper, we address these questions in a stylized model of Zero Intelligence traders who make repeated decisions at which of three...
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