This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Background Risk and the Theory of the Competitive Firm under Uncertainty

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Wong, Kit Pong
Abstract

This paper examines the optimal production decision of a firm under output price risk "a la" Sandmo when the firm also faces a dependent background risk. It is shown that standard risk aversion plus a non-negative association between the output price risk and the background risk are sufficient to ensure a reduction in the firm's optimal output upon introduction of the background risk. The paper investigates the impact of a deterministic transformation of the background risk on the firm's optimal production decision. It is shown that decreasing absolute risk aversion in Ross' sense is among the sufficient conditions that generate an unambiguous negative comparative static result. Copyright 1996 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Download Info
To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Publisher Info
Article provided by Blackwell Publishing in its journal Bulletin of Economic Research.

Volume (Year): 48 (1996)
Issue (Month): 3 (July)
Pages: 241-51
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bla:buecrs:v:48:y:1996:i:3:p:241-51

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0307-3378

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. repec:mop:credwp:04.01.44 is not listed on IDEAS
  2. Kit Wong, 2000. "Insurance and the behavior of competitive firms under revenue risks: a note," Journal of Economics, Springer, vol. 71(3), pages 305-314, October. [Downloadable!] (restricted)
  3. Udo Broll & Jack E. Wahl, 2004. "Optimal hedge ratio and elasticity of risk aversion," Economics Bulletin, Economics Bulletin, vol. 6(5), pages 1-7. [Downloadable!]
Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by editing a NEP report.

This page was last updated on 2009-12-18.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.