Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 15, 2023 erstellt
Description:
Futures contracts have been highly successful financial securities, with substantial trading volumes and active underlying asset markets. In a dynamic market framework, we show that imperfect competition in future spot markets motivates trades in futures contracts in earlier periods. The introduction of futures contracts can improve the risk sharing among traders and thus their equilibrium payoffs by mitigating the liquidity distortion due to cross-round price inference and allowing traders to overcome the winner's curse. The source of uncertainty in the market matters for the welfare effects of futures contracts: Specifically, when within-round inference on asset values is present, the implications for welfare are ambiguous