IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v21y1986i2p145-148.html

Firm's hedging behavior without the expected utility hypothesis

Author

Listed:
  • Safra, Zvi
  • Zilcha, Itzhak

Abstract

In this note we analyze the behavior of a competitive firm under price; uncertainty and in the presence of a futures market. We show that the; 'Separation property', i.e., the independence of the firm's production level; of the stochastic price's distribution, holds even if the firm maximize; non—expected utility functional and is not risk averse.; Secondly, we show that its behavior in the futures market is the same as in; the classical environment, even if one asks for a weaker notion of risk; averseness. Finally, we briefly analyze the state—dependent case.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Safra, Zvi & Zilcha, Itzhak, 1986. "Firm's hedging behavior without the expected utility hypothesis," Economics Letters, Elsevier, vol. 21(2), pages 145-148.
    • Handle: RePEc:eee:ecolet:v:21:y:1986:i:2:p:145-148
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/0165-1765(86)90054-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Finkelshtain, Israel & Hewitt, Julie, "undated". "Relaxing The Expected Utility Hypothesis And Entry/Exit Decisions Of The Risk-Averse Firm," 1990 Annual meeting, August 5-8, Vancouver, Canada 271061, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Broll, Udo & Egozcue, Martín & Wong, Wing-Keung, 2009. "Prospect theory and two moment model: the firm under price uncertainty," Dresden Discussion Paper Series in Economics 01/09, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:21:y:1986:i:2:p:145-148. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.