 Competition and Integration among Stock Exchanges in Europe: Network Effects, Implicit Mergers and Remote AccessCarmine Di Noia European Financial Management, 2001, vol. 7, issue 1, 39-72 Abstract: The economic theory of network externalities and a simple‐game theoretical framework are used to explore the issue of competition among stock exchanges and the possibility of consolidation in the European stock‐exchange industry. The paper shows the existence of equilibria where exchanges may decide, even unilaterally, to achieve full compatibility through implicit mergers and remote access, specialising only in trading or listing services. Thus the consolidation of European exchanges into one may occur with a welfare‐efficient outcome or with a lock‐in to a Pareto‐inferior equilibrium, due to the network externalities and the different starting points of the various exchanges. ‘Implicit mergers’ among exchanges together with remote access are always weakly (in half of the cases, strictly) more efficient than the actual competition. This finding also sheds light on the existence and efficacy, of ATS and rating agencies, which can be viewed respectfully as exchanges specialising in trading and listing services. Date: 2001 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:eufman:v:7:y:2001:i:1:p:39-72 Ordering information: This journal article can be ordered from Access Statistics for this article European Financial Management is currently edited by John Doukas More articles in European Financial Management from European Financial Management Association Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.