Competition Among the Exchanges before the SEC: Was the NYSE a Natural Hegemon?
Improved information technology and higher volume should drive orders to be concentrated in one market, lowering the costs of transactions. However, the opposite occurred during the bull market of the 1920s when rapid technological change spawned a flood of new issues. This paper employs newly recovered data for 1900-1933 on the volume and seat prices of regional exchanges to examine how these rivals successfully competed with the NYSE, leading to its relative decline at the zenith of the market. The history of U.S. exchanges reveals that the tendency towards concentration of trading is periodically reversed when new industries, whose technologies are risky and unfamiliar, are more easily accommodated by existing or new rivals to the dominant exchange
I wish to thank the participants of the 2009 Utrecht World Economic History Congress session on "Stock Exchange Microstructure and Regulation" and two anonymous referees for their helpful comments. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
White, Eugene N., 2013. "Competition among the exchanges before the SEC: was the NYSE a natural hegemon?," Financial History Review, Cambridge University Press, vol. 20(01), pages 29-48, April. citation courtesy of