Real effects of futures markets on firm and industry behavior: A study of institutions and contracting in the crude oil industry.

摘要

This dissertation examines the nature of the cost of contracting and how contracting costs depend on institutional factors. In particular, it considers the effect of a futures market on the cost of contracting in the underlying commodity market. The introduction of a futures market changes the margins of performance for firms in the underlying industry by altering the relative costs associated with different types of contractual forms and by providing a new type of contracting in itself. This results in changes in the nature of contracting between firms, the scope and types of firms in the industry, the vertical structure of the industry, and the internal resource allocation decisions of the firm. This study provides empirical evidence of these effects in the context of the crude oil industry and the 1983 introduction of the New York Mercantile Exchange crude oil futures market. Subsequent to the creation of the futures market, the trading level of the industry disappeared, the degree of vertical integration in the industry was reduced, and the terms of contracting in the industry changed. All of these changes are explained in a transaction cost framework. Further, data from an independent refining company illustrate the use of the futures market as a supply contract and its effect on the firm's contracting choice and resource allocations.