Competition and Product Quality: Fake Trading on Crypto

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

Evgeny Lyandres

Topic: Competition and Product Quality: Fake Trading on Crypto Exchanges

Speaker: Evgeny Lyandres, Tel Aviv University  

Venue: Hybrid - Both face to face and online

On campus | Face to face seminar in room CB08.08.002, Building 8, University of Technology Sydney, Australia (Map of campus)

Abstract: How competition affects product quality and how product quality choices impact firms’ operating performance are open empirical questions. We use a setting that is especially suitable to answering these questions: cryptographic exchanges, on which product quality is inversely related to fake (inflated) trading volume. We find that both static and dynamic competition measures are positively associated with fake trading, indicating that competition may lead to reduced product quality. Exchanges that inflate trading volume succeed in misleading investors in the short run but are punished in the long run, consistent with the tradeoff between short-lived increases in rents and future losses due to damaged reputation.

The paper is also available online. 

Seminar protocols:

  • The seminar will run for 45 minutes, followed by a 15 minute Q&A session
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any issues
  • Participants can raise their hand to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or they can ask the question directly to the presenter

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Co-ordinator: Kenny Phua

Enquiries: Jin Jo

 

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