A single exchange brings all traders together reducing search and monitoring costs and thereby reducing trading costs. The single exchange as a monopoly can ext

A single exchange brings all traders together reducing search and monitoring costs and thereby reducing trading costs. The single exchange as a monopoly can extract rents from members and has little incentive to improve stuff, e.g. infrastructure. So the tension is between the monopoly power and the liquidity externality arrising from bringing traders together to the same place. The market makers do not necessarily have a monopoly, they can compete against each other, but face monopoly level fees, potentially. (This is my amateur economic analysis, but I think basically this is what economists think.) A fragmented market increases competition on fees and infrastructure, but traders face search, monitoring costs and the cost of dealing with HFTs.