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SUMMARY:Rothschild Lecture:  What do we agree on when we disagree? Forward
  contracts with private forecasts - Eddie Anderson (University of Sydney)
DTSTART:20190429T150000Z
DTEND:20190429T160000Z
UID:TALK123253@talks.cam.ac.uk
CONTACT:INI IT
DESCRIPTION:Forward<br>contracts are used for hedging purposes when firms 
 operate in a spot market.<br>What will happen when firms have different vi
 ews on the future distribution of<br>prices and are risk averse? We discus
 s different ways in which two firms may<br>agree on a bilateral forward co
 ntract: either through direct negotiation using<br>the ideas of a Nash bar
 gaining solution\, or through a broker. We discuss a type<br>of equilibriu
 m in which each firm offers a supply function linking quantities<br>and pr
 ices\, and the clearing price and quantity for the forward contracts are<b
 r>determined from the intersection. Each firm may also be able to use the 
 offer<br>of the other firm to augment its own information about the future
  price.
LOCATION:Seminar Room 1\, Newton Institute
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