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Competition among Securities Markets

Author

Listed:
  • Pierre-Cyrille Hautcoeur

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Amir Rezaee

    (ISG - ISG International Business School [Paris])

  • Angelo Riva

    (EBS Paris - European Business School Paris)

Abstract

We study the causes and the consequences of two regulatory changes affecting the competition between the transparent Parquet and the OTC-like Coulisse markets in Paris at the turn of the 20th century. First, we provide evidence supporting the interest group theory to explain regulatory changes. By using these changes as natural experiments, we show then that competition widens bid-ask spreads while monopoly makes them narrower. These results are in line with recent literature questioning the effects of "dark" competition: a transparent monopoly could be more effective than competition if the latter involves opaque markets.

Suggested Citation

  • Pierre-Cyrille Hautcoeur & Amir Rezaee & Angelo Riva, 2018. "Competition among Securities Markets," Working Papers halshs-01863942, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01863942
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01863942
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    References listed on IDEAS

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    Keywords

    Spreads; Paris Stock Exchange; Market microstructure; Reforms; Regulation; Monopoly;
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