Endogenous Determination of the Degree of Market-Incompleteness in Futures Innovation

@inproceedings{hashi1995EndogenousDO,
  title={Endogenous Determination of the Degree of Market-Incompleteness in Futures Innovation},
  author={Kazuhiko Ōhashi},
  year={1995}
}
Abstract This paper studies the determination of the number of futures contracts created by an exchange. We show that though the exchange can create the futures contracts costlessly; if the investors have differential information, there may be an upper bound on the number of contracts that the exchange is willing to create. In a stylized economy, we investigate what type of contracts and how many of these the exchange is willing to create. Journal of Economic Literature Classification Numbers… CONTINUE READING