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Stock and commodity markets work well because one share or contract is pretty indistinguishable from another. A continuous, bid/ask model will only work if they
by byrneseyeview 18y ago
Stock and commodity markets work well because one share or contract is pretty indistinguishable from another. A continuous, bid/ask model will only work if they're careful to trade within certain bands of quality. Even then the 'lemons' problem applies. The rest is interesting, though.
- run4yourlives 18y agoBingo. That was the major problem I saw with this as well. Your iPod and my iPod may have been bought on the same day and at the same location. But you left your's on your desk for 3 years, and I took mine on my deployment to Iraq. There are two very different values there.
- bdfh42 18y agoI suspect that location could be a big factor - we don't all live in the Bay area. How do you value my car against your similar vehicle when they are several thousand miles apart. Plus the Nigerian problem will also raise it's head.If you can't sell a laptop on Ebay any more then will you be able to sell it here?
- eru 18y agoOr because they are mathematically distinguishable from each other. E.g. They are certain relations between options with different parameters - an algorithmic trader can then provide the liquidity even for continuous parameters. Unfortunately that does not seem to be the case in the exchanges right now. They stick mostly with a carefully restricted set of parameters that was useful in an era of human-only trading.