SUPPLY AND DEMAND RISKS IN LABORATORY FORWARD AND SPOT MARKETS: IMPLICATIONS FOR AGRICULTURE

Laboratory experimental methods are used to investigate the impacts of supply and/or demand risks on prices, quantities traded, and earnings within forward and spot market institutions. Random demand and/or supply shifts can be as much as 25 percent of the expected equilibrium outcome. Nevertheless, results suggest that the spot or forward trading institution itself has a greater influence on market outcomes than the presence of risk within the trading institutions. Sellers tend to have relatively higher earnings in a spot market than buyers, regardless of the risk. Total surplus, however, generally is greater in a forward market.


Issue Date:
2000-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/15388
Published in:
Journal of Agricultural and Applied Economics, Volume 32, Number 1
Page range:
159-173
Total Pages:
15




 Record created 2017-04-01, last modified 2017-08-23

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