Winner Takes All

Sonali Garg ()

Chapter Chapter 3 in The Telegraph and Stock Exchanges, 2024, pp 9-14 from Palgrave Macmillan

Abstract: Abstract Falling average costs for stock markets are discussed. Four costs are considered and explained (i) Commissions, (ii) Bid Ask Spreads, (iii) The time needed to find a matching trade, and (iv) The potential movement of price against the entity initiating a trade. All four costs decline as a specific security’s volume traded at a particular venue increases. When stock exchanges compete, eventually a single stock exchange emerges as the winner, i.e., as the natural monopolist.

Keywords: Bid ask spreads; Commissions; Economies of scale; Falling average costs; Foreign exchange; Natural monopolies; Natural duopoly; Positive network externalities; Potential movement of price against the entity initiating a trade; Time needed to find a matching trade (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palscp:978-3-031-40407-8_3

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DOI: 10.1007/978-3-031-40407-8_3

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