Service-Production under Uncertainty
AbstractThis essay presents a microeconomic model of a service-producing firm that faces an additively stochastic demand and has some price setting power in the market. The nature of the output implies that the firm sets its price and potential (instead of actual) output levels to maximize expected profits. It is shown that decisions in terms of potential output result in low employment variability. This explains, at least partially, the well established empirical fact that employment level volatility in service-producing industries is significantly lower than goods-producing industries.
Download InfoTo 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.
Bibliographic InfoArticle provided by Cyprus Economic Society and University of Cyprus in its journal Ekonomia.
Volume (Year): 2 (1998)
Issue (Month): 1 (Summer)
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Managing Editor).
If references are entirely missing, you can add them using this form.