Market structure affects crash probabilities from "summary" of Why Stock Markets Crash by Didier Sornette
The way a market is structured can have a significant impact on the likelihood of a crash occurring. This is because the structure of a market influences the behavior of market participants and the dynamics of price movements. For example, in a market where there are a large number of small investors who tend to follow the herd, the potential for a crash may be higher. This is because when a large number of investors all decide to sell at the same time, it can create a cascade effect that drives prices down rapidly. Conversely, in a market that is dominated by a small number of large institutional investors who have access to sophisticated trading strategies and information, the likelihood of a crash occurring may be lower. This is because these investors are more likely to be able to anticip...
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