Export production, hedging exchange rate risk: the duopoly case

摘要: This paper studies a Cournot duopoly in international trade so that the firms are exposed to exchange rate risk. A hedging opportunity is introduced by forward market where foreign currency can be traded on. We investigate two settings: First we assume and output decisions taken simultaneously. show just done for risk managing reasons as it not possible use strategically. In this setting well-known separation result of competitive firm holds if both have opportunity. second made before decisions. used only manage exposure but also strategic device. Furthermore find no stated.