Competition with Forward Contracts: A Laboratory Analysis Motivated By Electricity Market Design

• DOI: 10.1111/j.1468-0297.2007.02109.x
• Publication Date: 2010-09-20T11:31:57Z
• Authors: Jordi Brandts; Paul Pezanis‐Chri...; Arthur Schram
• Keywords: Forward contract; Supply

We use experiments to study the efficiency effects of adding possibility forward contracting a spot market. focus on strategic implications market and consider both quantity supply function competition. In cases we compare effect contract introduction an additional competitor. find that, as theory suggests, for types competition significantly lowers prices. The combination with leads high levels.