E-COMMERCE IN AGRICULTURE: DEVELOPMENT, STRATEGY, AND MARKET IMPLICATIONS

Marketing,

Market Stability vs. Market Resilience: Regulatory Policies Experiments in an Agent-Based Model with Low- and High- Frequency Trading

We investigate the effects of different regulatory policies directed towards high-frequency trading (HFT) through an agent-based model of a limit order book able to generate flash crashes as the result of the interactions between low- and high-frequency (HF) traders. We analyze the impact of the imposition of minimum resting times, of circuit breakers (both ex-post and ex-ante types), of cancellation fees and of transaction taxes on asset price volatility and on the occurrence and duration of ash crashes. In the model, low- frequency agents adopt trading rules based on chronological time and can switch between fundamentalist and chartist strategies. In contrast, high-frequency traders activation is event-driven and depends on price fluctuations. In addition, high-frequency traders employ low-latency directional strategies that exploit market information and they can cancel their orders depending on expected profits. Monte-Carlo simulations reveal that reducing HF order cancellation, via minimum resting times or cancellation fees, or discouraging HFT via financial transaction taxes, reduces market volatility and the frequency of ash crashes. However, these policies also imply a longer duration of flash crashes. Furthermore, the introduction of an ex-ante circuit breaker markedly reduces price volatility and removes ash crashes. In contrast, ex-post circuit breakers do not affect market volatility and they increase the duration of flash crashes. Our results show that HFT-targeted policies face a trade-o between market stability and resilience. Policies that reduce volatility and the incidence of flash crashes also imply a reduced ability of the market to quickly recover from a crash. The dual role of HFT, as both a cause of the flash crash and a fundamental actor in the post-crash recovery underlies the above trade-off

Essays in High Frequency Trading and Market Structure

High Frequency Trading (HFT) is the use of algorithmic trading technology to gain a speed advantage when operating in financial markets. The increasing gap between the fastest and the slowest players in financial markets raises questions around the efficiency of markets, the strategies players must use to trade effectively and the overall fairness of markets which regulators must maintain. This research explores markets affected by HFT activity from three perspectives. Firstly an updated microstructure model is proposed to allow for empirical exploration of current levels of noise in financial markets, this illustrates current noise levels are not disruptive to dominant trading strategies. Second, a ARCH type model is used to de-compose market data into a series of traders working price levels to demonstrate that in cases of suspected market abuse, regulators can assess the impact individual traders make on price even in fast markets. Finally, a review of various HFT control measures are examined in terms of effectiveness and in light of an ordoliberal benchmark of fairness. The work illustrates the extents to which HFT activity is not yet disruptive, but also shows where HFT can be a conduit for market abuse and provides a series of recommendations around use of circuit breakers, algorithmic governance standards and additional considerations where assets are dual listed in different countries

Markets, Contracts, or Integration? The Adoption, Diffusion, and Evolution of Organizational Form

The rise of contract farming and vertical integration is one of the most important changes in modern agriculture. Yet the adoption and diffusion of these new forms of organization has varied widely across regions, commodities, or farm types, however. Transaction cost theories and the like are not fully effective at explaining the variation of adoption rates of different organizational forms, in part because of their inherent static nature. In order to explain the adoption, diffusion and evolution of organizational form, a more dynamic framework is required. This paper lays out such a framework for understanding the evolution of organizational practices in U.S. agriculture by drawing on existing theories of economic organization, the diffusion of technological innovation, and organizational complementarities. Using recent trends as stylized facts we argue that the agrifood sector is characterized by strong complementarities among its constituent features and that these complementarities help explain the stylized facts. We also discuss several testable hypotheses concerning changes in organizational form in agriculture.contracting, vertical integration, organizational innovation, diffusion, Institutional and Behavioral Economics, L14, L22, Q13, O33,

Costs and benefits of superfast broadband in the UK

This paper was commissioned from LSE Enterprise by Convergys Smart Revenue Solutions to stimulate an open and constructive debate among the main stakeholders about the balance between the costs, the revenues, and the societal benefits of ‘superfast’ broadband. The intent has been to analyse the available facts and to propose wider perspectives on economic and social interactions. The paper has two parts: one concentrates on superfast broadband deployment and the associated economic and social implications (for the UK and its service providers), and the other considers alternative social science approaches to these implications. Both parts consider the potential contribution of smart solutions to superfast broadband provision and use. Whereas Part I takes the “national perspective” and the “service provider perspective”, which deal with the implications of superfast broadband for the UK and for service providers, Part II views matters in other ways, particularly by looking at how to realise values beyond the market economy, such as those inherent in neighbourliness, trust and democrac

The New Stock Market: Sense and Nonsense

How stocks are traded in the United States has been totally transformed. Gone are the dealers on NASDAQ and the specialists at the NYSE. Instead, a company’s stock can now be traded on up to sixty competing venues where a computer matches incoming orders. High-frequency traders (HFTs) post the majority of quotes and are the preponderant source of liquidity in the new market. Many practices associated with the new stock market are highly controversial, as illustrated by the public furor following the publication of Michael Lewis’s book Flash Boys. Critics say that HFTs use their speed in discovering changes in the market and in altering their orders to take advantage of other traders. Dark pools – off-exchange trading venues that promise to keep the orders sent to them secret and to restrict the parties allowed to trade – are accused of operating in ways that injure many traders. Brokers are said to mishandle customer orders in an effort to maximize the payments they receive for sending trading venues their customers’ orders, rather than delivering best execution. In this Article, we set out a simple, but powerful, conceptual framework for analyzing the new stock market. The framework is built upon three basic concepts: adverse selection, the principal-agent problem, and a multivenue trading system. We illustrate the utility of this framework by analyzing the new market’s eight most controversial practices. The effects of each practice are evaluated in terms of the multiple social goals served by equity-trading markets. We ultimately conclude that there is no emergency requiring immediate, poorly considered action. Some reforms proposed by critics, however, are clearly desirable. Other proposed reforms involve a trade-off between two or more valuable social goals. In these cases, whether a reform is desirable may be unclear, but a better understanding of the trade-off involved enables a more informed choice and suggests areas in which further empirical research would be useful. Finally, still other proposed reforms are based on misunderstandings of the market or of the social impacts of a practice and should be avoided

The High Frequency Trading Phenomenon and its Influence on Capital Markets: Evidences from the Pound Flash Crash

High frequency trading is very controversial practice that dominates the capial markets. It may entail the proliferation of flash crash events. An example is that of pound flash crash of 7 october 201

Profitability of Mergers and Acquisitions in Finland before and during the Financial Crisis

This research thesis concentrates on evaluating the short- and long-term profitability of Finnish companies M&A transactions. Examined full sample period includes the years from 2001 to 2010. Total period is also divided into two sub-periods in order to analyze the recent Financial Crisis’ impact on the profitability of M&A transactions. General statement from previous studies is that mergers and acquisitions are profitable for acquired company’s shareholders but the wealth impacts on the acquirer company’s shareholders is however ambiguous. In addition the wealth effects seems to be more positive during the short-term but the positive effects seem to vanish after longer examined period. Previous studies have mainly concentrated on US and UK markets and there are not many studies conducted with Finnish data. The purpose of this study is to find out whether the mergers and acquisitions are profitable transactions for the shareholders of the acquiring company. Analysis is conducted for both, short- and long- terms and in addition the recent financial crisis is taken into account. Short-term results are examined with general event study methodology and the statistical significance of abnormal returns is tested with t-test. Long-term results are examined with wealth relative method and finally the volatility adjusted mean components from wealth relatives are tested with t-test. General event study methodology is appropriate method for short-term studies but in order to avoid the problems which arise from long-term event studies, this research paper exploits the wealth relative method for long-term period analyze. The results suggest that in the short-term Finnish companies’ M&A transactions have even positive impact on shareholders’ wealth. When the examined period is extended the wealth impact decrease and finally the M&A transactions seem to generate negative returns. In addition the results suggest slight improvement in profitability during the crisis period but any of the difference was not statistically significant.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format