Do Forward Markets Enhance Competition ? Experimental Evidence †

@inproceedings{Coq2002DoFM,
  title={Do Forward Markets Enhance Competition ? Experimental Evidence †},
  author={Chlo{\'e} Le Coq and Henrik Orzen},
  year={2002}
}
Abstract: Hedging risks is an important rationale for the existence of forward markets. However, Allaz and Vila (1993) show that duopolists can also have a strategic motive to sell forward, irrespective of exogenous uncertainties. Moreover, in their model the possibility of forward trading increases competitiveness between the two firms, raising consumer surplus and welfare. In this study we analyze the case of an n firm oligopoly in Allaz’ and Vila’s framework and derive comparative static… CONTINUE READING
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