Two models of market transparency are presented. The first model analyzes the effects an order flow transparency rule when market participants can choose to trade in a transparent or in a non-transparent market. This choice problem leads to very different results than the previous analysis of market transparency. First of all, it explains how both kinds of markets do co-exist in reality. Second, it demonstrates how a transparency rule that is imposed to prevent a market crisis can actually exacerbate the problem; and finally it provides insight into why transparent markets are preferred in the trading of active stocks.;Second model presents an analysis of firm behavior regarding the choice of listing in an exchange. Strict disclosure requirements in organized exchanges after the enactment of the Securities Act in 1933 led to increased costs of listing in an exchange along with a better signaling of a firm's value. However, due to the historical accounting procedures adopted after the Act, young firms could not signal themselves as precisely as the older firms. Consistent with previous literature, the model predicts that, after the 1933 Securities Act until 1964, young firms preferred trading over-the-counter while older firms preferred to trade in an organized exchange. This explains the disappearance of new issues by young firms, and the increase in firm age in organized exchanges following the Act. The observance of the increase in firm age after the amendment in 1964 for the Act to include over-the-counter trading is also in line with the model's predictions.
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