@article{TEXTUAL,
      recid = {12988},
      author = {Budish, Eric and Lee, Robin S. and Shim, John J.},
      title = {A Theory of Stock Exchange Competition and Innovation:  Will the Market Fix the Market?},
      journal = {Journal of Political Economy},
      address = {2024-03-20},
      number = {TEXTUAL},
      abstract = { Will stock exchanges innovate to address latency  arbitrage and the arms race for speed? This paper models  how exchanges compete in the modern electronic era and how  this shapes incentives for market-design innovation. In the  status quo, exchange trading fees are competitive, but  exchanges earn economic rents from selling speed. These  rents create a wedge between private and social incentives  to innovate and support the persistence of an inefficient  market design in equilibrium of a market-design adoption  game. We discuss implications for policy and insights for  the literatures on market design, innovation, and  platforms.},
      url = {http://knowledge.uchicago.edu/record/12988},
}