The Search Theory of OTC Markets

Intermediation in Us and EU Bond and Swap Markets: Stylised Facts, Trends and Impact of the Coronavirus (Covid-19) Crisis in March 2020

“…Before we describe the institutional details, we will briefly summarise the key concepts of OTC market functioning. Unlike exchanges with full transparency for pre-trading and post-trading, OTC markets are sometimes characterised as "semi-centralised" (Weill, 2020) due to the vital role played by dealers. Typically, all details of a trade are known only to the counterparties.…”

Search Frictions and Efficiency in Decentralized Transportation Markets

“…In addition to labor markets, the search and matching framework has been used in other decentralized markets, seeWeill (2020) for over-the-counter financial markets,Burdett and Coles (1997) andShimer and Smith (2000) for marriage markets andLagos and Wright (2005) for monetary exchange.2 More recently, Bilal (2020) extends the results inAcemoglu (2001) to the spatial context and shows that there are too many low productivity jobs in high productivity locations.3 Extending the literature, we also show how to restore efficiency in the case of decreasing returns to scale in the matching technology. In addition, compared toHosios (1990), we consider a more general setup with a network of interconnected markets and without the Nash bargaining assumption on pricing.…”