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First, pick a thick market.
And as any economist will tell you, you're more likely to be an outrageous flirt when faced with a thick market.
In a less thick market, a big institution may find that the overall cost of doing a deal has increased, because the price impact of a large trade is greater.One response available to marketmakers is to invest in speed too.
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Meanwhile, governments trying to prop their currencies up or hold them down often do so with trades against the dollar, even if they're trying to affect some other exchange rate, again because of those thick markets.
So you get a matrix that looks like this: The dollar is, first of all, a vehicle currency (mainly in the interbank market) thanks to thick markets: if a bank wants to convert bolivars into zlotys, it will generally trade the bolivars for dollars, then the dollars for zlotys, rather than try to find someone wanting to make the reverse trade.
We present evidence that our portfolio trading mechanism facilitates equilibration to the extent that the thicker markets do.
We study the performance of the CVT mechanism experimentally and compare it to the performance of parallel, unconnected double auctions in experiments with similar parametrization and either a similar number of subjects or substantially thicker markets.
Diamond's model is an example of a "thick-market externality" that causes markets to function better when more people and firms participate in them.
The firms prefer a thick labor market; thus, an agglomeration of people is needed.
With a thick labor market, suddenly this person is able to seek out employment and instantly know who is hiring.
If you want to see what a somewhat thick labor market looks like, take a look at the service jobs in areas like food preparation and building maintenance.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com