Economists like to make idealised assumptions. When it comes to financial markets, they often assume a frictionless market where demand and supply curves interact to generate equilibrium prices and traces. This abstraction is useful but actual trading mechanisms may not achieve this ideal. For one thing, they require resources, human and otherwise. That means trading costs. Also, each trading venue approaches the ideal differently. This means trading venues are, to a greater or lesser extent, in competition and it means that trading mechanisms are constantly evolving.
Glosten, Lawrence. "The Past, Present, and Future of Trading Stocks," Financial Times, May 14, 2001.
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