Essays on technology and information in financial and industrial exchanges

This dissertation consists of three essays on information in financial markets and business-to-business exchanges.; The first essay is on the effects of liquidity trading on the dynamics of a financial market under long-lived asymmetric information. We describe a multi-period discrete time model and find the equilibrium. We then examine the equilibrium in the continuous time analogue of the model for a single informed trader and examine the effects of parameters on market performance. We find that liquidity traders' reaction to informed trading impedes information dissemination to the market and it may be in a profit-maximizing informed trader's best interest to curtail the amount of information he acquires. If the informed trader can release some of his information to the market before the trading starts, for a wide range of parameter values, he voluntarily chooses to do so and this may increase market liquidity and efficiency significantly.; The second essay examines the effects of liquidity trading and trading friction on market equilibrium and optimal market design. We examine the question of optimal clearing frequency for maximizing liquidity trader welfare in a multi-period dynamic market. Our results suggest that there is a close relationship between optimal clearing frequency, the number of informed traders and the ratio of the original informational asymmetry and potential liquidity trading intensity. We also examine the effect of endogenous entry by informed traders, finding how the level of entry costs affects the optimal clearing frequency.; The final essay examines the implications of the existence of a Business-to-Business exchange that facilitates trade between the manufacturers of a consumer good and a monopolistic supplier who provides an input to them. Dynamic contracting equilibrium between the participants with and without the existence of the exchange is derived. We find that the existence of the exchange reduces transaction prices between the supplier and the manufacturers. When the exchange is sufficiently liquid, parties choose not to engage in contracting at all, carrying out all purchases through the exchange. We also examine the effects of industry parameters such as fragmentation, variability of demand and costs, and information quality on contracting and consumer welfare.