Market power mitigation by contracts

04th march 2008, from 10.30 am to 12.30 pm

GIS LARSEN, campus of Fontenay aux Roses

Speaker : Bert Willems (Tilburg Law and Economic Center, Tilburg University)

Abstract : The presentation aims to discuss the classical results of Allaz et Villa (1993) on the mitigation of market power incentives by the development of forward contracts. We model a repeated game where firms decide about contracts and production in each stage and where their risk exposure is regulated. It shows that the reduction of system risk and the reduction of market power might go hand in hand.


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