This quotation is from an interview with William Donaidson, who at the time was the chairman of the NYSE, and appeared in the New York Times on January 30, 1990:

There's a need to understand the advantages of an auction market versus a dealer market.

The auction market allows a buyer and a seller to get together and agree on a price and the dealer is not involved at all. That's opposed to a dealer market where the house is on both sides of the trade and the dealer makes the spread rather than having the spread shared by the buyer and the seller. One of the things we're coming to the forefront on now is the whole idea of what makes a good market. I think the best market is where you have the maximum number of people coming together in a single location and bidding against each other... That is far superior to what we are getting now, which is a tractionalization of the market. Traders on machines, trades in the closet, trades in many areas where buyers and sellers don't have the opportunity to meet.

a. What is meant by an auction market?

b. What is meant by a dealer market?

c. Discuss Mr. Donaldson's opinion. In your answer, be sure to address the pros and cons of the different trading structures addressed in the chapter.