Issues in Assessing Trade Execution Costs

Author(s):  
Hendrik (Hank) Bessembinder
Keyword(s):  
1988 ◽  
Vol 1988 (3) ◽  
pp. 31-35
Author(s):  
Greta E. Marshall
Keyword(s):  

2018 ◽  
Vol 54 (6) ◽  
pp. 2605-2634 ◽  
Author(s):  
George Issa ◽  
Elvis Jarnecic

Traders can reduce search costs in dealership markets by entering relationships with dealers. However, dealers draw little informational benefit from these relationships in Treasury markets, due to low risk and information asymmetry. We investigate the extent, duration, effects on pricing, and potential benefits of client–dealer relationships. We find that relationship strength leads to higher execution costs for clients, more so during stressed market conditions but less so in the presence of information asymmetry and when trading in corporate bonds. Relationship traders are compensated with immediacy at times when search is costly.


2020 ◽  
Vol 12 (17) ◽  
pp. 7232
Author(s):  
Jesus Javier Losada-Maseda ◽  
Laura Castro-Santos ◽  
Manuel Ángel Graña-López ◽  
Ana Isabel García-Diez ◽  
Almudena Filgueira-Vizoso

The employer (owner) of the project wants to obtain the maximum profit for the money invested and the consultant (contractor) will try to give less for that money. The regulation of their relationship is based on the contractual agreement, which in the energy sector is mainly based on the engineering, procurement, and construction (EPC) model. The objective of this work was to evaluate which factors should be included in the drafting of contracts, to minimize problems between the parties, and thus minimize execution costs and optimize operation and maintenance costs. Information and data on the integration of operability and maintainability criteria in contracts for 158 projects, with a total contract value of close to €40,000M, were analyzed. Several of those projects corresponded to wind, solar, and hydroelectric plants. The information collected the perception of the agents involved, and was classified according to the experience of the agents consulted in the operation and maintenance areas. Finally, the proposed criteria were prioritized. In general, the owner is willing to introduce these criteria in his contracts if they reduce the operation and maintenance cost by around 1–5%, while the contractor is interested in increasing his probability to be selected by 1–3%.


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