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Comparative statics for state-contingent technologies

Author

Listed:
  • John Quiggin

    () (Department of Economics, University of Queensland)

  • Robert G. Chambers

    () (Dept of Agricultural and Resource Economics, University of Maryland, College Park)

Abstract

The implications of supermodularity for comparative-static analysis in a generalized version of the separable-effort representation of a firm facing stochastic prices and a stochastic technology are. Previous analysis is generalized in two ways. General risk-averse, as opposed to expected-utility, preferences are considered. The stochastic technology is represented by an Arrow-Debreu state-space representation. It is shown that results familiar from the theory of the price taking firm in the absence of risk generalize to the uncertain case.

Suggested Citation

  • John Quiggin & Robert G. Chambers, 2003. "Comparative statics for state-contingent technologies," Risk & Uncertainty Working Papers WPR03_5, Risk and Sustainable Management Group, University of Queensland.
  • Handle: RePEc:rsm:riskun:r03_5
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    File URL: http://www.uq.edu.au/rsmg/WP/WPR03_5.pdf
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    References listed on IDEAS

    as
    1. Milgrom, Paul, 1994. "Comparing Optima: Do Simplifying Assumptions Affect Conclusions?," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 607-615, June.
    2. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    3. Susan Athey, 2002. "Monotone Comparative Statics under Uncertainty," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 187-223.
    4. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
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    Cited by:

    1. Susan Athey, 2002. "Monotone Comparative Statics under Uncertainty," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 187-223.

    More about this item

    Keywords

    state-contingent production;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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