Over‐the‐counter (OTC) trading thrives despite competition from exchanges. We let OTC dealers cream skim from exchanges in an otherwise standard Glosten and Milgrom framework. Restricting the dealer's ability to cream skim induces “cheap substitution”: some traders exit while others with larger gains from trade enter. Cheap substitution implies trading costs, trade volumes, and market shares are poor policy indicators. In a benchmark case, restricting the dealer raises welfare only if trading cost increases, volume falls, and OTC market share is high. By contrast, the restriction improves welfare when adverse selection risk is low. A simple procedure implements the optimal Pigouvian tax.

中文翻译：

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监管场外交易市场

尽管存在来自交易所的竞争，但场外交易 （OTC） 仍然蓬勃发展。我们让场外交易商在原本标准的 Glosten 和 Milgrom 框架中从交易所中脱脂。限制经销商的奶油脱脂能力会导致“廉价替代品”：一些交易者退出，而另一些从交易中获得较大收益的交易者进入。廉价替代品意味着交易成本、交易量和市场份额都是糟糕的政策指标。在基准案例中，只有在交易成本增加、交易量下降且场外交易市场份额高的情况下，限制交易商才能提高福利。相比之下，当逆向选择风险较低时，限制可以提高福利。一个简单的程序实现了最佳的 Pigouvian 税。