Which one is more efficient and cost effective
For large amounts of trading a quote (price) driven market is more efficient and cost effective. Bid/Ask spreads are tighter. i.e. NASDAQ An auction driven market is better for low volume securities (I’m not entirely sure why because you could get screwed by a high Bid/Ask spread). No market makers. Public book of limit orders. i.e. Paris, Tokyo
I read order driven markets are cost effective and price driven markets are efficient. Do you agree?
Agreed with drk. The mechanism of order driven market leads to its cost-effective.