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Medium · Game Theory & Logic · Quant Trader interview question · game-theory, braess-paradox, market-microstructure, order-routing
Braess's Paradox states that adding a resource to a network can sometimes increase the overall cost for all users. Consider a scenario with two existing trading venues, A and B. Traders can route their orders to either venue. Suppose a new, purportedly faster venue, C, is introduced, allowing traders to route orders through it. However, the addition of venue C changes the order flow dynamics. Which of the following best describes a scenario where the addition of venue C increases the average ex