• Graduate program
    • Why Tinbergen Institute?
    • Program Structure
    • Courses
    • Course Registration
    • Recent PhD Placements
    • Admissions
    • Facilities
  • Research
  • News
  • Events
    • Events Calendar
    • Tinbergen Institute Lectures
    • Annual Tinbergen Institute Conference
    • Events Archive
    • Summer School
      • Econometric Methods for Forecasting and Data Science
      • Introduction in Genome-Wide Data Analysis
      • Business Data Science Summer School Program
  • Times

Brandts, J., Pezanis-Christou, P. and Schram, A. (2008). Competition with forward contracts: a laboratory analysis motivated by electricity market design Economic Journal, 118(525):192--214.


  • Journal
    Economic Journal

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