The Efficient Deterrence of Manipulation in Future Markets

S.C. Pirrong

Washington University from Business, Law and Economics Center, John M. Olin School of Business, Washington University

Abstract: Market manipulation -- the exercise of market power in a future market- is a felony under US commodity law, but recent court and regulatory decisions have made conviction of a manipulator problematic at best. Instead, regulators attempt to prevent manupulation through verious means. Deterrence is more efficient than prevention if manupulations can be detected ex post with high probability. This article examines a particular episode of attempted manupulation -- the Ferruzzi soybean episode of 1989-- to demonstrate how to test the exercise of market power in a commodity market.

Keywords: COMMODITIES; REGULATION (search for similar items in EconPapers)
JEL-codes: L50 L52 O13 (search for similar items in EconPapers)
Pages: 58 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:fth:wablec:97-07

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