Risk-Neutral Monopolists are Variance-Averse
AbstractIf the production of a risk-neutral monopolist is in uenced by a random variable, then the expected pro t is decreasing in the variance of the production process.
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Bibliographic InfoPaper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 09012.
Length: 4 pages
Date of creation: Apr 2009
Date of revision:
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More information through EDIRC
Risk-aversion; correlated random variables; market power;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-16 (All new papers)
- NEP-RMG-2009-05-16 (Risk Management)
- NEP-UPT-2009-05-16 (Utility Models & Prospect Theory)
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.:
- Holden, Craig W. & Subrahmanyam, Avanidhar, 1994. "Risk aversion, imperfect competition, and long-lived information," Economics Letters, Elsevier, vol. 44(1-2), pages 181-190.
- Gibbons, Robert, 1987.
"Piece-Rate Incentive Schemes,"
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University of Chicago Press, vol. 5(4), pages 413-29, October.
- Serguei Kaniovski, 2003. "Risk-Averse Monopolist with Aspiration," WIFO Working Papers 196, WIFO.
- Lazear, Edward P & Rosen, Sherwin, 1981.
"Rank-Order Tournaments as Optimum Labor Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 89(5), pages 841-64, October.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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