Brown Bag Seminar - Giorgio Ottonello (Vienna University of Economics and Business)

We are pleased to welcome Giorgio Ottonello (Vienna University of Economics and Business) as our speaker.

He will present his paper “Shadow Discounts” (co-authored with Tomy Lee, Isacco Lotti, Florian Nagler, and Chaojun Wang).

Abstract:

Centralized trading platforms should improve competition in OTC markets. Using transaction records from the U.S. corporate bond market and exploiting variation within client-dealer relationships, we find no evidence that clients receive better secondary market trading terms after adopting a platform. To reconcile this puzzling finding, we present a model in which relationship dealers operate in both primary and secondary markets. A key insight, for which we find strong empirical support, is that dealers respond to clients’ improved outside options not by changing secondary market terms, but by granting larger primary market allocations. Based on the model, we estimate that platform adoption accounts for 77% of clients’ pre-adoption profits from primary market allocations. Overall, the effects of platforms in OTC markets are more complex than previously thought.

The Brown Bag Seminar will take place on November 18, 2026, from 12:00 p.m. to 1:00 p.m. in Room D4.4.008.