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Prove that in the two-party supply chain discussed in class (i.e., a manufacture and a retailer), a buy-back contract can be viewed as a special
Prove that in the two-party supply chain discussed in class (i.e., a manufacture and a retailer), a buy-back contract can be viewed as a special type of options contracts. (Hint: For a given buy back contract, construct an option contract with special parameters such that the sales as well as the costs are the same under both contracts)
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