Cournot Competition, Forward Markets and Efficiency - HEC Paris - École des hautes études commerciales de Paris Access content directly
Journal Articles Journal of Economic Theory Year : 1993

Cournot Competition, Forward Markets and Efficiency

Abstract

We build a model with two Cournot duopolists who produce at Time 0 wich is the date at which all demand is realized. N periods before time 0, the duopolists trade on a forward market for delivery at Time 0. Having made these contracts, they trade again at time ( − N + 1) for delivery at Time 0. etc. We show that, in equilibrium, each of them will sell forward which makes them worse off and makes consumers better off than if the forward market did not exist. When N, the number of forward trading periods prior to production, tends to infinity, the outcome tends to the competitive solution.

Keywords

Domains

Dates and versions

hal-00511806 , version 1 (26-08-2010)

Identifiers

Cite

Blaise Allaz, Jean-Luc Vila. Cournot Competition, Forward Markets and Efficiency. Journal of Economic Theory, 1993, 59 (1), pp.1-16. ⟨10.1006/jeth.1993.1001⟩. ⟨hal-00511806⟩

Collections

HEC
254 View
0 Download

Altmetric

Share

Gmail Facebook X LinkedIn More