Equilibrium investment is reduced if we allow for forward contracts
- Grimm, Veronika
- Zoettl, Gregor
Revista:
Working papers = Documentos de trabajo: Serie AD
Año de publicación: 2006
Número: 5
Tipo: Documento de Trabajo
Resumen
In this paper we analyze incentives to invest in capacity prior to asequence of Cournot spot markets with varying demand. We compareequilibrium investment in the absence and in presence of the possibility to tradeon forward markets. We find that the possibility to trade forwards reducesequilibrium investments.