Payments for order flow on Nasdaq
Publication
, Journal Article
Kandel, E; Marx, LM
Published in: Journal of Finance
January 1, 1999
We present a model of Nasdaq that includes the two ways in which marketmakers compete for order flow: quotes and direct payments. Brokers in our model can execute small trades through a computerized system, preferencing arrangements with marketmakers, or vertical integration into market making. The comparative statics in our model differ from those of the traditional model of dealer markets, which does not capture important institutional features of Nasdaq. We also show that the empirical evidence is inconsistent with the traditional model, which suggests that preferencing and vertical integration are important components in understanding Nasdaq.
Duke Scholars
Published In
Journal of Finance
DOI
ISSN
0022-1082
Publication Date
January 1, 1999
Volume
54
Issue
1
Start / End Page
35 / 66
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
Citation
APA
Chicago
ICMJE
MLA
NLM
Kandel, E., & Marx, L. M. (1999). Payments for order flow on Nasdaq. Journal of Finance, 54(1), 35–66. https://doi.org/10.1111/0022-1082.00098
Kandel, E., and L. M. Marx. “Payments for order flow on Nasdaq.” Journal of Finance 54, no. 1 (January 1, 1999): 35–66. https://doi.org/10.1111/0022-1082.00098.
Kandel E, Marx LM. Payments for order flow on Nasdaq. Journal of Finance. 1999 Jan 1;54(1):35–66.
Kandel, E., and L. M. Marx. “Payments for order flow on Nasdaq.” Journal of Finance, vol. 54, no. 1, Jan. 1999, pp. 35–66. Scopus, doi:10.1111/0022-1082.00098.
Kandel E, Marx LM. Payments for order flow on Nasdaq. Journal of Finance. 1999 Jan 1;54(1):35–66.
Published In
Journal of Finance
DOI
ISSN
0022-1082
Publication Date
January 1, 1999
Volume
54
Issue
1
Start / End Page
35 / 66
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment