Inventory Management, Dealers' Connections, and Prices in Over‐the‐Counter Markets

Autor:	Peter Hoffmann, Jean-Edouard Colliard, Thierry Foucault
Rok vydání:	2021
Předmět:	Economics and Econometrics Core (game theory) Inventory management Commerce Accounting Holding cost Business Finance Market liquidity
Zdroj:	The Journal of Finance. 76:2199-2247
ISSN:	1540-6261 0022-1082
DOI:	10.1111/jofi.13034
Popis:	We propose a new model of interdealer trading. Dealers trade together to reduce their inventory holding costs. Core dealers share these costs efficiently and provide liquidity to peripheral dealers, who have heterogeneous access to core dealers. We derive predictions about the effects of peripheral dealers’ connectedness to core dealers and the allocation of aggregate inventories between core and peripheral dealers on the distribution of interdealer prices, the efficiency of interdealer trades, and trading costs for the dealers’ clients. For instance, the dispersion of interdealer prices is higher when fewer peripheral dealers are connected to core dealers or when their aggregate inventory is higher.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::ff3486106282a725bbb9bc403ccf2830 https://doi.org/10.1111/jofi.13034 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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