Supply and Demand Risks in Laboratory Forward and Spot Markets: Implications for Agriculture

Posted: 21 Nov 2000

See all articles by Chris T. Bastian

Chris T. Bastian

University of Wyoming

Dale J. Menkhaus

University of Wyoming

Patrick O'Neill

University of Wyoming

Owen R. Phillips

University of Wyoming - College of Business - Department of Economics and Finance

Abstract

Laboratory experimental methods are used to investigate the impacts of supply and/or demand risks on prices, quantities traded, and earnings within forward and spot market institutions. Random demand and/or supply shifts can be as much as 25 percent of the expected equilibrium outcome. Nevertheless, results suggest that the spot or forward trading institution itself has a greater influence on market outcomes than the presence of risk within the trading institution. Sellers tend to have relatively higher earnings in a spot market than buyers, regardless of the risk. Total surplus, however, generally is greater in a forward market.

Key Words: Laboratory Markets, Forward Market, Spot Mmarket, Supply and/or Demand Risks

Suggested Citation

Bastian, Chris T. and Menkhaus, Dale J. and O'Neill, Patrick and Phillips, Owen R., Supply and Demand Risks in Laboratory Forward and Spot Markets: Implications for Agriculture. Available at SSRN: https://ssrn.com/abstract=244632

Chris T. Bastian

University of Wyoming ( email )

Box 3434 University Station
Department of Agricultural and Applied Economics
Laramie, WY 82071
United States
(307) 766-4377 (Phone)

Dale J. Menkhaus (Contact Author)

University of Wyoming ( email )

Box 3434 University Station
Department of Applied Agricultural Economics
Laramie, WY 82071
United States
307-766-5128 (Phone)
307-766-5544 (Fax)

Patrick O'Neill

University of Wyoming

Box 3434 University Station
Department of Agricultural and Applied Economics
Laramie, WY 82071
United States

Owen R. Phillips

University of Wyoming - College of Business - Department of Economics and Finance ( email )

P.O. Box 3985
Laramie, WY 82071-3985
United States
307-766-2195 (Phone)
307-766-5090 (Fax)

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