Cartel Behaviour and Futures Trading

Ronald W Anderson and Tiziano Brianza

CEPR Financial Markets Paper from European Science Foundation Network in Financial Markets, c/o C.E.P.R, 33 Great Sutton Street, London EC1V 0DX.

Abstract: In this paper we explore how a cartel which is able to cooperate to a limited degree on a futures market may be able to implement a cooperative production plan which would be self-enforcing. The basic result of the paper is that appropriately chosen initial allocations of long positions in the futures market will induce members to implement noncooperatively any cooperative outcome a cartel might desire, but which would be unachievable otherwise because production quotas cannot be enforced directly. The optimal cartel futures policies are characterized both with and without side-payments. Possible obstacles to these policies are analysed. In particular we explicitly characterize the conditions under which the cartel futures policies will fail because they result in a corner of the futures market.

Keywords: Cartels; Commodity Agreements; Futures Markets (search for similar items in EconPapers)
Date: 1991-06
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprfm:0014

Ordering information: This working paper can be ordered from

The price is 4.00 pounds or 8.00 dollars per paper.

Access Statistics for this paper

More papers in CEPR Financial Markets Paper from European Science Foundation Network in Financial Markets, c/o C.E.P.R, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().