Multi-Output Firm Under Price Uncertainty
AbstractA closed-form dual representation of the multi-output production problem is developed under CARA and the large exponential family of multivariate price distributions. System-wide response analysis allows an understanding of second moment and risk tolerance effects, and provides insights on distorting subsidies admissible under World Trade Organization agreements. We demonstrate second-order flexibility in the sense that any empirical first and second moments can be imposed. Production complementarity results are identified for a special linearized version of the model. Incentives under the class of elliptically contoured distributions are studied, as are speculation decisions in the presence of futures markets.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12408.
Date of creation: 01 May 2006
Date of revision:
Publication status: Published in Journal of Economics and Business, May/June 2006, vol. 58, pp. 181-201
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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Other versions of this item:
- NEP-AGR-2007-02-17 (Agricultural Economics)
- NEP-ALL-2007-02-17 (All new papers)
- NEP-INT-2007-02-17 (International Trade)
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