# Effect of Network Relations on the Adoption of Electronic Trading Systems

> MeRC Working Paper #20 by Montazemi, Siam and Esfahanipour, June 2007: interviews with 90 fixed-income managers and traders show why electronic trading systems lag.

Page URL: https://merc-mcmaster.ca/working-papers/effect-of-network-relations-on-the-adoption-of-electronic-trading-systems/

Working Paper #20 by Ali Reza Montazemi, John J. Siam, and Akbar Esfahanipour, June 2007.

- Information systems can intermediate between buyers and sellers.
- Electronic marketplaces lower buyers' cost of learning prices and offerings.
- The 45 trillion-dollar fixed-income market still made little use of them.

## Method and findings

- Face-to-face interviews covered 90 senior managers and traders at 25 institutions.
- The study examined social capital in interpersonal market networks.
- Embedded interpersonal ties let participants exploit information asymmetry.
- Electronic trading conflicts with existing norms for large transactions.

Keywords: information flow, alternative trading systems, IT-mediated network ties, embedded relationships.