Equilibrium in production and futures markets
Abstract
This paper develops a general equilibrium analysis of production and futures markets with free entry/exit. It does so by analyzing partial equilibria with a reference utility level and entry/exit, first in a product market and then in a futures market. The markets are then considered jointly. Comparative statics results arise due to a mismatch between the source of disequilibrium and the compensation mechanism which restores reference utility. Risk aversion is a sufficient structure on preferences to determine most of the results. However, the well-known separation result is modified somewhat in the two-market model. Author Keywords: General equilibrium; Optimal hedge ratio; Separation(This abstract was borrowed from another version of this item.)
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Bibliographic Info
Article provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 49 (1997)
Issue (Month): 5 ()
Pages: 399-418
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Web page: http://www.elsevier.com/locate/jeconbus
Related research
Keywords:Other versions of this item:
- Hennessy, David A., 1997. "Equilibrium in Production and Futures Markets," Staff General Research Papers 10673, Iowa State University, Department of Economics.
References
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- Appelbaum, Elie & Katz, Eliakim, 1986. "Measures of Risk Aversion and Comparative Statics of Industry Equilibrium," American Economic Review, American Economic Association, vol. 76(3), pages 524-29, June.
- Chavas, Jean-Paul & Pope, Rulon D & Leathers, Howard, 1988. "Competitive Industry Equilibrium under Uncertainty and Free Entry," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 331-44, April.
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