Bibliograph

Exclusion through speculation, Cédric Argenton and Bert Willems

Type

Label

Exclusion through speculation, Cédric Argenton and Bert Willems

Language

eng

Abstract

Many commodities are traded on both a spot market and a derivative market. We show that an incumbent producer may use purely financial derivatives to extract rent from a potential entrant. It can do so by selling derivatives to a large buyer for more than his expected production level. This exclusionary scheme comes at the cost of inefficiently deterring entry and creating too much risk for the buyer. We further show that it can still be used when contracts are offered anonymously through a broker, as the incumbent can signal its identity by adjusting the contracting terms

Bibliography note

Includes bibliographical references (pages 29-33)

Index

no index present

Literary Form

non fiction

Main title

Exclusion through speculation

Oclc number

785634820

Responsibility statement

Cédric Argenton and Bert Willems