Abstract
The entry reviews essential elements of market structure — the systems, procedures, and protocols that determine how orders are handled, translated into trades, and transaction prices determined. There are various contrasting alternatives, such as order-driven and quote-driven markets; consolidated vs fragmented markets; human intervention vs electronic trading; and continuous markets vs periodic call auctions. A major objective of market design noted in the discussion is to enhance the accuracy with which prices are discovered in a dynamic, uncertain environment. Lastly, the entry points out that market structures are rapidly changing, and that much remains to be learned about how best to structure a technologically sophisticated, hybrid market that efficiently services the varied needs of diverse participants.
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Schwartz, R.A., Peng, L. (2006). Structure of securities markets1 . In: Lee, CF., Lee, A.C. (eds) Encyclopedia of Finance. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-26336-6_64
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DOI: https://doi.org/10.1007/978-0-387-26336-6_64
Publisher Name: Springer, Boston, MA
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