Strategic Investment, Forward Markets and Competition

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Strategic Investment, Forward Markets and Competition

Aichele, Markus
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Zitierfähiger Link (URI): http://hdl.handle.net/10900/57697
http://nbn-resolving.de/urn:nbn:de:bsz:21-dspace-576975
Dokumentart: Wissenschaftlicher Artikel
Erscheinungsdatum: 2014-09-22
Originalveröffentlichung: University of Tübingen Working Papers in Economics and Finance ; No. 76
Sprache: Englisch
Fakultät: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Fachbereich: Wirtschaftswissenschaften
DDC-Klassifikation: 330 - Wirtschaft
Schlagworte: Investition
Freie Schlagwörter: Wettbewerb
Industrial Organization
Strategic Investment
Forward Trading
Cournot Competition
Energy Markets
Lizenz: http://tobias-lib.uni-tuebingen.de/doku/lic_ohne_pod.php?la=de http://tobias-lib.uni-tuebingen.de/doku/lic_ohne_pod.php?la=en
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Abstract:

I model the strategic interaction between firms, that face decisions on investment, forward contracts and spot market quantities. For an investment decision that takes place after firms have contracted forward but before firms compete on the spot market (medium term investment), competition becomes fierce. Thus, the efficiency gains from forward trading found by Allaz and Villa (1993) still are present. However, for an investment that takes place before firms contract forward (long term investment), competition becomes rather weak. When investment matters, from a welfare point of view the desirability of forward trading critically depends on the structure of decision making.

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