We analyze how information about quality may be conveyed via forward trading. A privately informed monopolist has the opportunity to make forward sales. Speculators and consumers, participating in the forward and the spot markets respectively, observe the monopolist's decisions in these markets. We show that forward trading may emerge in equilibrium although the monopolist has neither insurance nor hedging incentives. Indeed, the high-quality monopolist uses forward trading to reduce the cost of signalling quality through spot prices. We conclude that forward trading indirectly contributes to signal quality more efficiently in the spot market. Copyright 2003 by the RAND Corporation.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Volume (Year): 34 (2003) Issue (Month): 3 (Autumn) Pages: 478-94 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)