Structure as an Independent Variable in Assessing Stock Market Failures

82 Pages Posted: 15 Dec 2003

Date Written: December 1, 2003

Abstract

The recent frontrunning by specialists on the New York Stock Exchange call for an explanation of why an institution thought to be efficient has flaws that permit this activity. The conclusion is that not only the NYSE, but the entire American securities market, is structured in a way that virtually automatically diverts rents to outsiders. Institutional theory and economic sociology reveal that market structure alone ensures rent transfers from retail investors to market professionals, regardless of the motivations of behavior of the latter. The theory is explained and additional uses suggested.

Keywords: securities, finance

Suggested Citation

Wasserman Mitchell, Ezra, Structure as an Independent Variable in Assessing Stock Market Failures (December 1, 2003). Available at SSRN: https://ssrn.com/abstract=478401 or http://dx.doi.org/10.2139/ssrn.478401

Ezra Wasserman Mitchell (Contact Author)

Shandong University ( email )

27 Shanda Nanlu
South Rd.
Jinan, SD Shandong 250100
China

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