This paper analyzes how the presence of a futures market gives risk averse dealers in the spot asset opportunities for arbitrage that reduces the spot market bid-ask spread through reducing the dealers risk exposure. In particular, if the spot and futures risks are perfectly correlated then the...

This paper considers the joint investment and labour contracts (employment and wage compensation) for a firm which has private information over its expost revenues. There is costly state observation for investors in the firm; workers can free ride on any investors state observation. The...