Journal article

A time to give and a time to receive : role switching and generalized exchange in a financial market

  • Lomi, Alessandro ORCID Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
  • Bianchi, Federica Facoltà di scienze informatiche, Università della Svizzera italiana, Svizzera
  • 2021
Published in:
  • Social networks. - 2021
English We study the effect of generalized exchange as a possible mechanism reproducing the flows of resources among participants in financial markets. In an analysis of on-line trading in a major European interbank market for liquidity, we find that generalized exchange is unlikely to affect sequences of short-term market transactions, but it emerges forcefully in the longer-term. This empirical result is consistent with our predictions that generalized exchange may be understood only with reference to the temporal micro-structure of transactions linking occupants of market roles (“buyers” and “sellers,” in our case). We also find that generalized exchange does not affect larger market transactions in the shorter-term, and is unlikely to emerge in the longer-term. This result is consistent with our prediction that generalized exchange does not operate as a stabilizing mechanism for asymmetric market transactions when they involve higher levels of risk. The results of the study clarify how and when context-specific differences in time and value of transactions trigger (or inhibit) generic network mechanisms in decentralized systems of exchange like, for example, markets.
  • English
Social sciences
Open access status
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