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Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach

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  • Barry T. Coyle

Abstract

A duality model of production is developed that endogenizes stochastic output decisions under risk aversion. The model incorporates both yield and price uncertainty and nonlinear mean-variance risk preferences. This permits modeling of the firm's expected output supply and input demand decisions under risk and also, in principle, the firm's output variance decisions. The duality model is tractable for empirical research. Copyright 1999, Oxford University Press.

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  • Barry T. Coyle, 1999. "Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 553-567.
  • Handle: RePEc:oup:ajagec:v:81:y:1999:i:3:p:553-567
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