Forward Contracts, Market Structure and the Welfare Effects of Mergers

Autor:	Joseph Podwol, Nathan H. Miller
Rok vydání:	2020
Předmět:	Antitrust enforcement Economics and Econometrics media_common.quotation_subject 05 social sciences Economic surplus General Business Management and Accounting Profit (economics) Microeconomics Market structure Forward contract Accounting 0502 economics and business Collusion Economics Forward market Profitability index Market power 050207 economics Welfare 050205 econometrics media_common
Zdroj:	The Journal of Industrial Economics. 68:364-407
ISSN:	1467-6451 0022-1821
DOI:	10.1111/joie.12222
Popis:	We examine how forward contracts affect economic outcomes under generalized market structures. In the model, forward contracts discipline the exercise of market power by making profit less sensitive to changes in output. This impact is greatest in markets with intermediate levels of concentration. Mergers reduce the use of forward contracts in equilibrium and, in markets that are sufficiently concentrated, this amplifies the adverse effects on consumer surplus. Additional analyses of merger profitability and collusion are provided. Throughout, we illustrate and extend the theoretical results using Monte Carlo simulations. The results have practical relevance for antitrust enforcement.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::f84decaa6834bf3828dac9f4c81e000c https://doi.org/10.1111/joie.12222 Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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