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Imperfect Competition in Financial Markets: Recent Developments

Marzena Rostek¹; Ji Hee Yoon²

¹ Department of Economics, University of Wisconsin-Madison · ² Department of Economics and School of Management, University College London

This article reviews the theory of imperfectly competitive financial markets, with special attention to recent contributions and rapidly growing areas of research. We highlight the methodological advances that have led to a unified analytic framework for static, dynamic, centralized, and decentralized markets. Accounting for imperfect competition has not only reshaped our understanding of financial market data but also underscored the importance of market structure, motivated novel policy tools and objectives, and opened new avenues for market design. We identify areas where new models and techniques could enable further progress on equilibrium and market design analyses for markets with large players. (JEL D43, D47, D53, G10)

DOI

10.1257/jel.20241340

Volume

63 (4)

Pages

1191-1243

Language

en

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BibTeX

Sources

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