Duality Theory for Variable Costs in Joint Production
AbstractDuality methods for incomplete systems of consumer demand equations are adapted to the dual structure of variable cost functions in joint production. This allows identification of necessary and sufficient restrictions on technology and cost so that conditional factor demands can be written as functions of input prices, fixed inputs, and cost. These are observable when variable inputs are chosen and committed to production, hence the identified restrictions allow ex ante conditional demands to be studied using observable data. This class of production technologies is consistent with all von Neumann--Morgenstern utility functions when ex post production and/or output prices are uncertain. Copyright 2010, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 92 (2010)
Issue (Month): 3 ()
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Other versions of this item:
- Jeffrey LaFrance & Rulon Pope, 2008. "Duality Theory for Variable Costs in Joint Production," Working Papers 2009-02, School of Economic Sciences, Washington State University.
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- D2 - Microeconomics - - Production and Organizations
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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