MET Seminar - Simon Jantschgi
| Dates: | 6 November 2024 |
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| Times: | 17:00 - 18:00 |
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| What is it: | Seminar |
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| Organiser: | School of Social Sciences |
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| Who is it for: | University staff, Current University students |
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Title: The Hidden Cost of Zero-Commission
Abstract: This paper studies how transaction cost transparency influences incentives and welfare in two-sided markets. Hidden transaction costs induce price cycles in markets that would be stable with transparent transaction costs. To compete with hidden transaction costs, platforms with transparent costs must reduce them below the optimal monopolist level. In equilibrium, more risk-averse traders prefer transparent transaction costs, while less risk-averse traders choose hidden transaction costs. Depending on trader's risk-attitudes, transparent transaction costs can be more or less efficient than hidden transaction costs. Moreover, hidden transaction costs can potentially lead to market failure, as forward-looking traders may exploit price cycles.
Speaker website: https://www.simonjantschgi.com/
Contact: david.delacretaz@manchester.ac.uk
Travel and Contact Information
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Boardroom 2.016
Arthur Lewis Building
Manchester
