Offshore Bidding and Currency Futures

Donald Lien and Fathali Firoozi
Additional contact information
Donald Lien: Department of Economics, University of Texas at San Antonio, U.S.A.
Fathali Firoozi: Department of Economics, University of Texas at San Antonio, U.S.A.

International Journal of Business and Economics, 2008, vol. 7, issue 2, 125-136

Abstract: In an interactive model of offshore bidding, two firms located in two different countries bid on a project in a third country under exchange rate uncertainty. Every firm benefits and provides a higher bid when both firms have hedging opportunities. Even if only one bidder has the hedging opportunity, both bidders gain through an increase in their expected utilities.

Keywords: exchange rate; futures markets; uncertainty; game theory; multinational enterprise (search for similar items in EconPapers)
JEL-codes: C7 D8 F3 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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