Regulators can extract concessions from exchanges by leveraging market-launch priorities.

Evidence

Kansas City was a peripheral market that needed a boost, so Susan M. Phillips of the Commodity Futures Trading Commission (CFTC) requested that the Merc not insist on its priority over it and over the New York Stock Exchange’s newly established futures exchange. After a decade plotting the path to the “ultimate contract,” Melamed must have been tempted to insist on being the first to trade it, but he knew that “a favor of this kind to the CFTC would pay many dividends in the years ahead” (Melamed and Tamarkin 1996, p. 295). So Kansas City, not the Merc, was the first to trade index futures. — Donald MacKenzie, An Engine, Not a Camera, 772

Categorization

• XREF: Chains with the performativity thesis’s emphasis on the political and institutional work required to make a financial innovation take hold — Melamed and the Merc bending to CFTC pressure to secure future regulatory goodwill. — connects to: States tolerate or promote collusion when they capture a share of proceeds — Diego Gambetta, The Sicilian Mafia The Business of…, 512

Broader Connections

• States tolerate or promote collusion when they capture a share of proceeds #expands (0.82) — Diego Gambetta, The Sicilian Mafia The Business of…, 512