Abstract We hypothesize that corporate takeover markets create significant constraints for short sellers. Both sellers and bidders often target firms with declining economic prospects. Yet, a firm’s stock price generally increases upon announcement, resulting in losses Therefore, should require higher rates of return when the likelihood is higher. Consistent this prediction, predictability mont...

With the fragmentation of electronic markets, exchanges are now competing in order to attract trading activity on their platform. Consequently, they developed several regulatory tools control liquidity provision / consumption pool. In this paper, we study problem an exchange using incentives increase market liquidity. We model limit book as solution a stochastic partial differential equation (S...