A Strategic Analysis of Corners and Squeezes

B-Tier
Journal: Journal of Financial and Quantitative Analysis
Year: 1998
Volume: 33
Issue: 1
Pages: 117-137

Authors (2)

Cooper, David J. (Florida State University) Donaldson, R. Glen (not in RePEc)

Score contribution per author:

1.009 = (α=2.02 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We develop a dynamic game-theoretic model of a futures market in which prices can be manipulated by corner and squeeze. We investigate equilibrium trading strategies and the price dynamics these strategies produce. Price paths produced by our model can mimic observed prices for potentially comerable commodities and explain the volatility of certain prices even when no manipulations occur. Our model also generates occasional apparent price bubbles and accounts for the existence of normal backwardation in futures markets even when players are risk neutral.

Technical Details

RePEc Handle
repec:cup:jfinqa:v:33:y:1998:i:01:p:117-137_02
Journal Field
Finance
Author Count
2
Added to Database
2026-01-25