IDEAS home Printed from
   My bibliography  Save this article

Forward trading and adjustment costs in Cournot markets


  • Henry Thille
  • Margaret E. Slade


[eng] Many commodity markets satisfy the assumptions that underlie the Cournot model. These markets, however, have a feature that is not considered in that model - producers and consumers can enter into contracts for forward transactions. We consider the implications of forward trading for Cournot markets. In particular, we take the simple two-period game that is common in the literature and extend it to include various sorts of adjustment costs. The adjustment costs that we consider are of two sorts : They can involve time or periods during which players are committed to their decisions, or they can involve dollars or expenditure of resources when those decisions are changed. Whereas the former are procompetitive or output enhancing, we show that, in general, the latter are anticompetitive or output restricting. [fre] De nombreux marchés satisfont les hypothèses qui sont à la base du modèle de Cournot. Ces marchés ont cependant un trait qui n'est pas pris en compte dans ce modèle : les producteurs et les consommateurs peuvent contracter à terme. Nous considérons les implications des contrats à terme dans des marchés à la Cournot. En particulier, nous retenons un jeu à deux périodes assez commun dans la littérature et nous retendons afin d'intégrer différentes sortes de coûts d'ajustement. Les coûts d'ajustement que nous analysons sont de deux sortes. Ils peuvent impliquer des périodes de temps au cours desquelles les joueurs sont tenus par leurs décisions. Ou ils peuvent impliquer des dépenses de ressources en dollars quand ces décisions sont modifiées. Alors que les premiers sont concurrentiels, c'est-à-dire incitent à produire plus, les seconds sont anti-concurrentiels, c'est-à-dire incitent à produire moins.

Suggested Citation

  • Henry Thille & Margaret E. Slade, 2000. "Forward trading and adjustment costs in Cournot markets," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 177-195.
  • Handle: RePEc:prs:caecpo:cep_0154-8344_2000_num_37_1_1294
    DOI: 10.3406/cep.2000.1294
    Note: DOI:10.3406/cep.2000.1294

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Phlips, Louis, 1992. "Oligopolistic Pricing of Crude Oil Futures," The Economic Record, The Economic Society of Australia, vol. 0(0), pages 75-104, Supplemen.
    2. Fershtman, Chaim & Kamien, Morton I, 1990. "Turnpike Properties in a Finite-Horizon Differential Game: Dynamic Duopoly with Sticky Prices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 49-60, February.
    3. Allaz, Blaise, 1992. "Oligopoly, uncertainty and strategic forward transactions," International Journal of Industrial Organization, Elsevier, vol. 10(2), pages 297-308, June.
    4. Lapham, Beverly & Ware, Roger, 1994. "Markov puppy dogs and related animals," International Journal of Industrial Organization, Elsevier, vol. 12(4), pages 569-593, December.
    5. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    6. Vila, Jean-Luc, 1989. "Simple games of market manipulation," Economics Letters, Elsevier, vol. 29(1), pages 21-26.
    7. Hughes, John S. & Kao, Jennifer L., 1997. "Strategic forward contracting and observability," International Journal of Industrial Organization, Elsevier, vol. 16(1), pages 121-133, November.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. MITRAILLE Sébastien & MOREAUX Michel, 2007. "Inventories and Endogenous Stackelberg Hierarchy in Two-period Cournot Oligopoly," LERNA Working Papers 07.02.223, LERNA, University of Toulouse.
    2. Sébastien Mitraille & Michel Moreaux, 2013. "Inventories and Endogenous Stackelberg Leadership in Two-Period Cournot Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 852-874, December.
    3. Thille, Henry, 2003. "Forward trading and storage in a Cournot duopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 27(4), pages 651-665, February.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prs:caecpo:cep_0154-8344_2000_num_37_1_1294. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Equipe PERSEE). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.