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Faculty News September 15, 2025

Daniel Chen wins the 2025 WRDS-TME Best Paper Award

Daniel Chen has been presented with the WRDS-TME Best Paper Award for his paper “Optimal Exchange Design.” The award is given each year by The Microstructure Exchange and sponsored by Wharton Research Data Services

Chen is an Assistant Professor of Economics at Princeton University and an affiliated faculty member of the Bendheim Center for Finance.

Each academic year, all papers presented at TME are eligible for the WRDS-TME Best Paper Award. A selected group of reviewers votes to determine the best paper of the year, with the winning author(s) receiving a $3,000 monetary prize and an award trophy. Chen presented his paper virtually in December 2024.

In Optimal Exchange Design, Chen studies how to design trading exchanges for financial assets when the goal is to balance revenue generation with allocative efficiency. Using tools from mechanism design, he characterizes optimal trading mechanisms in a canonical market microstructure model with large strategic traders who face quadratic holding costs and possess private asset endowments. He studies how trading exchanges should be designed depending on the number of traders, private information, and traders’ aversion to holding the asset.

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