In this paper, we demonstrate using a simple model that reducing tick size may either reduce or increase adverse selection. Therefore, the effect of tick size on adverse selection is an important empirical question. At the same time, we demonstrate that the standard asymmetric information models...

This study examines dealer behavior and trading activity for a sample of 3,181 newly issued corporate bonds, focusing on underpricing at issuance and subsequent price dispersion. Unlike the equity market, the measured underpricing is the result of both an ex-ante pricing decision made by the...

This paper examines the relations between the number of market makers, trading activity, and price improvement in Nasdaq stocks, using a model motivated by Grossman and Miller (1988). Results indicate a positive relation between the number of market makers and trading frequency, and that...

This study examines the liquidity of real estate investment trusts (REITs), as measured by their bid-ask spread. We find that REIT spreads have increased over the period 1986-1990, are inversely related to market capitalization, and are similar in magnitude to spreads on other stocks of...

In response to the 1975 Congressional call for a national market system to provide a transparent link across individual markets that trade NYSE-listed stocks, the SEC caused the implementation of three electronic systems that provide a partial integration of these markets. This partial...

Nature provides critical ecosystem services on which society and businesses rely, but the effort and cost of utilizing those services can change with the climate. Both climatic trend and variance affect these efforts and costs, creating a complex decision space where uncertain future predictions...