The relationship between price uncertainty and specific investment is examined in a dynamic model that integrates the theories of real options and investment holdup. Because of weak contract enforcement, bilateral firms cannot use a contract to govern their bilateral investment and exchange...

This paper contributes to the debate on the link between speculation and price volatility in two ways. First, a simple CAPM model is used to derive the demand for commodity futures contracts by institutional investors, and this derived demand is then integrated into a simple rational...

The relationship between price uncertainty and specific investment is examined in a dynamic model that integrates the theories of real options and investment holdup. Because of weak contract enforcement, bilateral firms cannot use a contract to govern their bilateral investment and exchange...