Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (23)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Cuny, C. J.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

Rev Fin 1993; 6:57-78
© 1993 the Society for Financial Studies

Article

The role of liquidity in futures market innovations

CJ Cuny
Graduate School of Management, University of California, Irvine, CA 92717, USA

Abstract

I characterize the optimal design of a new futures market (an innovation) by an exchange in the presence of market frictions. Futures markets are characterized by both the contract and the level of trader participation; both can be determined by an exchange. A game in which exchanges simultaneously design markets is considered, and a particular equilibrium (not necessarily unique) is constructed. A game in which exchanges sequentially design markets (and incur design costs) is also considered and the (generically unique) equilibrium is constructed. The nature of equilibrium with multiple exchanges is discussed in these simultaneous and sequential settings, illustrating the roleplayed by liquidity considerations both in market design and in the nature of competition between exchanges.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 REV FINANC STUDHome page
R. Rahi and J.-P. Zigrand
Strategic Financial Innovation in Segmented Markets
Rev. Financ. Stud., June 15, 2008; (2008) hhn061v1.
[Abstract] [Full Text] [PDF]


Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.