Autori
Phlips, Louis
Brianza, Tiziano

Titolo
Futures markets, speculation and monopoly pricing
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1990 - Fascicolo: 8 - Pagina iniziale: 1 - Pagina finale: 20

The possibility for a futures market to exist when the underlying commodity (called the cash good) is monopolized has been studied only recently after a long period of neglect, possibly due to the implicit assumption that, since futures markets are typically competitive, the corresponding cash markets are also competitive. In the present paper we study a monopoly model of a storable good in a dynamic framework. The influence of the monopolist’s futures position on his intertemporal pricing and production policy and the reciprocal influence of the latter on the equilibrium of the futures market are analyzed. The possibility of taking a short position increases the monopolist’s output and reduces the expected variability of the cash price. Contract curves for futures positions are derived under the condition that the monopolist and the speculators have different prior beliefs. Our analysis highlights the essential role played by different prior beliefs ) in determining the size of the futures position, the futures price and speculative inventories.



Testo completo: http://hdl.handle.net/1814/347

Esportazione dati in Refworks (solo per utenti abilitati)