Production and hedging decisions in futures and forward markets

Jacob Paroush, Avner Wolf

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


This paper establishes the properties of (1) separation between production and risk elements, and (2) full hedging under unbiased price even in the presence of basis risk in the futures market. Also, a comparative statics highlights the richer effect of a change in the risk aversion on hedging when futures and forward markets coexist compared to that in the presence of just one market for hedging.

Original languageEnglish
Pages (from-to)139-143
Number of pages5
JournalEconomics Letters
Issue number2
StatePublished - 1986


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