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- Title
DISCUSSION.
- Authors
VAN HORNE, JAMES C.
- Abstract
The article provides commentary on a paper by Professors Thomas Ho and Hans R. Stoll contained in the present issue. The author sees their effort as an extension of earlier work by the two men. Their depiction of two dealers interacting to determine the bid-ask spread is illuminating, as is their account of how differences in inventories and reservation prices are limited. However, their assumptions are sufficiently strict to question whether their model can be generalized. Assuming perfect information about wealth, inventories, and utility preferences among dealers, for example, is problematic. Still, the paper makes a worthwhile contribution.
- Subjects
STOCK prices; PRICES of securities; HO, Thomas; STOLL, Hans R.; SECURITIES trading; FINANCIAL markets; SPREAD (Finance); INVENTORIES; BID price; ASKED price
- Publication
Journal of Finance (Wiley-Blackwell), 1980, Vol 35, Issue 2, p267
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1980.tb02154.x