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Author: Kit Pong Wong Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper examines the optimal production decision of a firm under output price risk á la Sandmo when the firm also faces a dependent background risk. It is shown that standard risk aversion plus a non-negative association between the output price risk and the background risk are sufficient to ensure a reduction in the firms optimal output upon introduction of the background risk. The paper investigates the impact of a deterministic transformation of the background risk on the firms optimal production decision. It is shown that decreasing absolute risk aversion in Ross' sense is among the sufficient conditions that generate an unambiguous negative comparative static result.
Author: Kit Pong Wong Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper examines the optimal production decision of a firm under output price risk á la Sandmo when the firm also faces a dependent background risk. It is shown that standard risk aversion plus a non-negative association between the output price risk and the background risk are sufficient to ensure a reduction in the firms optimal output upon introduction of the background risk. The paper investigates the impact of a deterministic transformation of the background risk on the firms optimal production decision. It is shown that decreasing absolute risk aversion in Ross' sense is among the sufficient conditions that generate an unambiguous negative comparative static result.
Author: Moawia Alghalith Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
We generalize the results of Sandmo (1971) and Ishii (1977). In doing so, we relax the assumption of non-increasing absolute risk aversion.
Author: Moawia Alghalith Publisher: ISBN: Category : Languages : en Pages : 4
Book Description
We show that the increase in price riskiness reduces the optimal output under increasing absolute risk aversion. That is, the marginal impact of the risk on output is independent of the type of absolute risk aversion (decreasing, constant, or increasing).
Author: Jean-Paul Chavas Publisher: Elsevier ISBN: 0121706214 Category : Business & Economics Languages : en Pages : 258
Book Description
The objective of Risk Analysis in Theory and Practice is to present this analytical framework and to illustrate how it can be used in the investigation of economic decisions under risk. In a sense, the economics of risk is a difficult subject: it involves understanding human decisions in the absence of perfect information. How do we make decisions when we do not know some of events affecting us? The complexities of our uncertain world and of how humans obtain and process information make this difficult. In spite of these difficulties, much progress has been made. First, probability theory is the corner stone of risk assessment. This allows us to measure risk in a fashion that can be communicated among decision makers or researchers. Second, risk preferences are now better understood. This provides useful insights into the economic rationality of decision making under uncertainty. Third, over the last decades, good insights have been developed about the value of information. This helps better understand the role of information in human decision making and this book provides a systematic treatment of these issues in the context of both private and public decisions under uncertainty. Balanced treatment of conceptual models and applied analysis Considers both private and public decisions under uncertainty Website presents application exercises in Excel
Author: Frank H. Knight Publisher: Cosimo, Inc. ISBN: 1602060053 Category : Business & Economics Languages : en Pages : 401
Book Description
A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.
Author: Mark Machina Publisher: Newnes ISBN: 0444536868 Category : Business & Economics Languages : en Pages : 897
Book Description
The need to understand the theories and applications of economic and finance risk has been clear to everyone since the financial crisis, and this collection of original essays proffers broad, high-level explanations of risk and uncertainty. The economics of risk and uncertainty is unlike most branches of economics in spanning from the individual decision-maker to the market (and indeed, social decisions), and ranging from purely theoretical analysis through individual experimentation, empirical analysis, and applied and policy decisions. It also has close and sometimes conflicting relationships with theoretical and applied statistics, and psychology. The aim of this volume is to provide an overview of diverse aspects of this field, ranging from classical and foundational work through current developments. Presents coherent summaries of risk and uncertainty that inform major areas in economics and finance Divides coverage between theoretical, empirical, and experimental findings Makes the economics of risk and uncertainty accessible to scholars in fields outside economics
Author: Kit Pong Wong
Author: Kit Pong Wong
Author: Moawia Alghalith
Author: Laurence D. Booth
Author: Yakir Plessner
Author: Agnar Sandmo
Author: Moawia Alghalith
Author: Iraj Fooladi
Author: Jean-Paul Chavas
Author: Frank H. Knight
Author: Mark Machina