Published June 1978
| public
Journal Article
Price uncertainty and the exhaustive firm
- Creators
- Burness, H. Stuart
Abstract
In the presence of a resource constraint the risk-averse exhaustive firm reacts to price uncertainty in a manner different than its competitive counterpart. In particular: (i) some results are independent of attitudes toward risk; (ii) comparative statics results differ from the no resource constraint case; and (iii) results depend upon the relative magnitudes of the discount rate and quasi-fixed costs. An assumption crucial to the relevance of risk-aversion in an intertemporal setting is the presence of imperfections in capital markets (i.e., the absence of complete contingent commodity markets).
Additional Information
© 1978 by Academic Press, Inc. Received March 16, 1977; revised August 24, 1977. Financial support from the Institute of Mining and Minerals Research, University of Kentucky, and from the Energy Research Development Association, Grant No. EX-76-G-03-1305, California Institute of Technology Energy Research Program is gratefully acknowledged. I wish to thank Stuart Greenbaum, Soren Lemche, and Agnar Sandmo for helpful comments, and Tracy Lewis for a suggestion that greatly improved the exposition of this paper. Helpful comments were also received from Ralph d'ilrge and a pair of anonymous references. Any inadequacies are my own. Formerly SSWP 156.Additional details
- Eprint ID
- 83417
- Resolver ID
- CaltechAUTHORS:20171121-162817267
- EX-76-G-03-1305
- Energy Research and Development Administration (ERDA)
- Caltech Energy Research Program
- University of Kentucky
- Created
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2017-11-22Created from EPrint's datestamp field
- Updated
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2021-11-15Created from EPrint's last_modified field