The Death of a Market: Standard Oil and the Demise of 19th Century Crude Oil Exchanges
From the mid-1870s through 1895, a commodities market in oil existed. Although its organization was primitive, it offered the varieties of commodity contracts familiar today. In 1895, Standard Oil announced that it would no longer use the Oil Exchange to set prices offered to producers. This raises...
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| Veröffentlicht in: | Review of industrial organization 1998-10, Vol.13 (5), p.569-587 |
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| container_title | Review of industrial organization |
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| creator | BROWN, JOHN HOWARD PARTRIDGE, MARK |
| description | From the mid-1870s through 1895, a commodities market in oil existed. Although its organization was primitive, it offered the varieties of commodity contracts familiar today. In 1895, Standard Oil announced that it would no longer use the Oil Exchange to set prices offered to producers. This raises a fascinating question, why was an efficient mechanism for price discovery discarded in favor of internal pricing by Standard Oil? Three possibilities are explored to explain the market's death: the role of Standard's monopsony power, transactions costs, and Standard's desire to eliminate the threat of crude producers forming cartels. |
| doi_str_mv | 10.1023/A:1007795128137 |
| format | Article |
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| ispartof | Review of industrial organization, 1998-10, Vol.13 (5), p.569-587 |
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| language | eng |
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| source | PAIS Index; SpringerNature Journals; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing |
| subjects | Cartels Commodity market Crude oil Empirical research Futures Futures markets Market prices Market structure Monopsony Oil Oil industry Oil market Oil pipelines Oil prices Petroleum Studies Supply Transaction costs |
| title | The Death of a Market: Standard Oil and the Demise of 19th Century Crude Oil Exchanges |
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