Ness, Bonnie F. Van; Ness, Robert A. Van; Warr, Richard S. - In: Journal of Financial Research 28 (2005) 3, pp. 461-485
We examine the impact of market maker concentration on adverse-selection costs for NASDAQ stocks and find that more market makers results in lower costs. Furthermore, this reduction in adverse selection exceeds the overall reduction in spreads that is attributable to market maker competition. We...