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...

This paper illustrates that the usual consumer surplus approach to evaluation of the benefits of a futures market fails because of certain unobserved benefits. In particular, when futures markets provide benefits in the form of a reduced variability of future spot prices, the usual consumer...

This paper considers a nonprofit firm competing against a for-profit firm in a homogenous goods market. Given a stochastic demand function and an asymmetric tax schedule, we derive Cournot-Nash equilibrium allowing the nonprofit firm to have an altruistic preference toward consumer surplus or...

None

Under current Internal Revenue Services guidelines, gains from futures contracts serving price (quantity) risk management purposes are treated as ordinary (capital) income. This paper finds that, although dual hedging opportunities are available, the asymmetric tax treatment prevents firms from...