EconPapers    
Economics at your fingertips  
 

Financial Intermediation and the Costs of Trading in an Opaque Market

Richard Green, Burton Hollifield and Norman Schürhoff
Authors registered in the RePEc Author Service: Norman Schuerhoff ()

Review of Financial Studies, 2007, vol. 20, issue 2, 275-314

Abstract: Municipal bonds trade in opaque, decentralized broker-dealer markets in which price information is costly to gather. We analyze a database of trades between broker-dealers and customers in municipal bonds. These data were only released to the public with a lag; the market was opaque. Dealers earn lower average markups on larger trades, even though dealers bear a higher risk of losses with larger trades. We estimate a bargaining model and compute measures of dealer’s bargaining power. Dealers exercise substantial market power. Our measures of market power decrease in trade size and increase in the complexity of the trade for the dealer.

JEL-codes: G0 G24 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (29) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/rfs/hhl012 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Financial Intermediation and the Costs of Trading in an Opaque Market (2005) Downloads
Working Paper: Financial Intermediation and the Costs of Trading in an Opaque Market
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:rfinst:v:20:y:2007:i:2:p:275-314.

Ordering information: This journal article can be ordered from
http://www4.oup.co.uk/revfin/subinfo/

Access Statistics for this article

Review of Financial Studies is currently edited by Maureen O'Hara

More articles in Review of Financial Studies from Society for Financial Studies Oxford University Press, Journals Department, 2001 Evans Road, Cary, NC 27513 USA.. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ( this e-mail address is bad, please contact ) and Christopher F. Baum ().

 
Page updated 2021-05-11
Handle: RePEc:oup:rfinst:v:20:y:2007:i:2:p:275-314.