Theories of Why A Forward Contract Exists
Allaz and Vila (1993) suggest that there is also a strategic reason (in an imperfect competitive environment) for the existence of forward trading, that is, forward trading can be used even in a world without uncertainty. This is due to firms having Stackelberg incentives to anticipate their production through forward contracts.
Read more about this topic: Forward Contract
Famous quotes containing the words theories of, theories, contract and/or exists:
“The real trouble about women is that they must always go on trying to adapt themselves to men’s theories of women, as they always have done. When a woman is thoroughly herself, she is being what her type of man wants her to be. When a woman is hysterical it’s because she doesn’t quite know what to be, which pattern to follow, which man’s picture of woman to live up to.”
—D.H. (David Herbert)
“A work of art that contains theories is like an object on which the price tag has been left.”
—Marcel Proust (1871–1922)
“A contract for better for worse is a contract that should not be tolerated.”
—George Bernard Shaw (1856–1950)
“I shall never send for a priest or recite an Act of Contrition in my last moments. I do not mind if I lose my soul for all eternity. If the kind of God exists Who would damn me for not working out a deal with Him, then that is unfortunate. I should not care to spend eternity in the company of such a person.”
—Mary McCarthy (1912–1989)