Multiple openings and competitiveness of forward markets: experimental evidence

Ferreira, Jose Luis, Kujal, Praveen and Rassenti, Stephen (2016) Multiple openings and competitiveness of forward markets: experimental evidence. PLoS One . pp. 1-16. ISSN 1932-6203 (doi:10.1371/journal.pone.0158098)

[img]
Preview
PDF - Published version (with publisher's formatting)
Download (545kB) | Preview

Abstract

We test the competition enhancing effect of selling forward in experimental Cournot duopoly and quadropoly with multiple forward markets. We find that having two forward periods yields competitive outcomes and that the results are very close to the predicted theoretical results for both quantity setting duopolies and quadropolies. Our experiments lend strong support to the hypothesis that forward markets are competition enhancing. We then test a new market that allows for endogenously determined indefinitely many forward periods that only close when sellers coordinate on selling a zero amount in a forward market. We find that the outcomes under an endogenous close rule are also very competitive. These results hold for both duopolies and quadropolies.

Item Type: Article
Research Areas: A. > Business School > Economics
Item ID: 20159
Useful Links:
Depositing User: Praveen Kujal
Date Deposited: 07 Jul 2016 11:30
Last Modified: 28 Aug 2019 10:26
URI: https://eprints.mdx.ac.uk/id/eprint/20159

Actions (login required)

Edit Item Edit Item

Full text downloads (NB count will be zero if no full text documents are attached to the record)

Downloads per month over the past year