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A Note on Bilateral Monopoly and Formula Price Contracts

โœ Scribed by Roger D. Blair and David L. Kaserman


Book ID
120826361
Publisher
American Economic Association
Year
1987
Tongue
English
Weight
557 KB
Volume
77
Category
Article
ISSN
0002-8282

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## Abstract Here we consider the hedging roles of a price futures contract versus a revenue futures contract. In the absence of idiosyncratic output risk, the revenue contract almost always dominates the price contract. Idiosyncratic output risk provides conditions under which the price contract sh