Relaxing competition through speculation: Committing to a negative supply slope

• 成果类型: Article
• 署名作者: Holmberg, Par; Willems, Bert
• 署名单位: Research Institute of Industrial Economics (IFN); University of Cambridge; Tilburg University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2015.06.004
• 发表日期: 2015
• 页码: 236-266
• 关键词: Supply function equilibrium; option contracts; strategic commitment

摘要

We demonstrate how commodity producers can take strategic speculative positions in derivatives markets to soften competition in the spot market. In our game, producers first choose a portfolio of call options and then compete in supply functions. In equilibrium, producers sell forward contracts and buy call options to commit to downward sloping supply functions. Although this strategy is risky, it is profitable because it reduces the elasticity of the residual demand of competitors who respond by increasing mark-ups. (C) 2015 Elsevier Inc. All rights reserved.