EconPapers    
Economics at your fingertips  
 

Flaunt the imperfections: information, entanglements and the regulation of London’s Alternative Investment Market

Philip Roscoe and Paul Willman

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The literature on financial market design is predicated on the efficient market hypothesis (EMH), advocating transparency, liquidity and universal information with a view to capturing efficient prices. We provide a counterfactual: the 1995 formation of AIM, the London Stock Exchange’s junior market. AIM employs an alternative mode of market organization based on market imperfections. Our empirical study shows how AIM draws on reputation, social relationships and practitioner knowledge to organize market governance. We argue that the market’s design should be understood as capable of producing informationally efficient prices. We characterize AIM as having a ‘Whitean’ structure, compared with the ‘Fama’ structure of main markets. We conclude that the ‘Whitean’ producer market is a viable design option for financial markets.

Keywords: Alternative Investment Market (AIM); efficient market hypothesis (EMH); Fama; Harrison White; market design; market imperfections (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2021-10-02
New Economics Papers: this item is included in nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Published in Economy and Society, 2, October, 2021, 50(4), pp. 565 - 589. ISSN: 0308-5147

Downloads: (external link)
http://eprints.lse.ac.uk/114480/ Open access version. (application/pdf)

Related works:
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:ehl:lserod:114480

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().

 
Page updated 2022-07-02
Handle: RePEc:ehl:lserod:114480