This paper develops a simultaneous stochastic rational-expectations model of futures- and spot-price determination. Using the model, the authors find that increases in what they term speculative intensity increase spot-price variability arising from storage-cost shocks, but decrease spot-price...

This article investigates monopoly and oligopoly provision of an addictive good. Consumer preferences are modeled as in Becker and Murphy (1988). Addictive goods have characteristics that create interesting strategic issues when suppliers are noncompetitive. We characterize the perfect Markov...