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Two essays on uncertainty

Thesis/Dissertation ·
OSTI ID:5485167
The first essay examines the extent to which the speculative storage of a commodity may serve as insurance against the effects of the shortfalls in supply. It addresses the issue of whether the profit maximizing speculative storage effects allocations that are Pareto efficient. Results indicate that under a wide variety of circumstances the storage decision of individual speculators, based on price signals received from competitive markets, results in allocations that are not even constrained Pareto efficient. The second essay is concerned with natural gas prices. The organization of the natural gas market differs significantly from the paradigm of exchange in a sequence of spot markets. An elaborate system of long term contracts governs the production and transportation of the commodity. The contracts have become a subject of interest because of the effect that they exert on the price of natural gas and because of widespread abrogation of contracts in the gas industry.
Research Organization:
Stanford Univ., CA (USA)
OSTI ID:
5485167
Country of Publication:
United States
Language:
English