Bert Willems March 1, 2005
Allaz and Vila (1993) show that the existence of futures markets increases the efficiency of markets in a Cournot setting. This paper looks at the efficiency effect of financial options in a similar framework. It shows that the existence of financial options also makes markets more efficient; though to a smaller extent than futures. This is particularly relevant for markets with market power and costly storage, like electricity markets.
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- AuthorBert Willems
- Deposited January 3, 2022
- Available January 3, 2022
- ISSN--
- Text Versionqt65h8p4sb.pdf.txt
- PDF Versionqt65h8p4sb.pdf