Optimal output for the regret-averse competitive firm under price uncertainty

Martín Egozcue; Xu Guo; Wing Keung Wong

doi:10.1007/s40822-015-0030-9

Optimal output for the regret-averse competitive firm under price uncertainty

Martín Egozcue, Xu Guo, Wing Keung Wong

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Abstract

We study the optimal output of a competitive firm under price uncertainty. Instead of assuming a risk-averse firm, we assume that the firm is regret-averse. We find that optimal output under uncertainty would be lower than under certainty. We also prove that optimal output could increase or decrease when the regret factor varies.

Original language	English (US)
Pages (from-to)	279-295
Number of pages	17
Journal	Eurasian Economic Review
Volume	5
Issue number	2
DOIs	https://doi.org/10.1007/s40822-015-0030-9
State	Published - Dec 1 2015

All Science Journal Classification (ASJC) codes

General Economics, Econometrics and Finance

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abstract = "We study the optimal output of a competitive firm under price uncertainty. Instead of assuming a risk-averse firm, we assume that the firm is regret-averse. We find that optimal output under uncertainty would be lower than under certainty. We also prove that optimal output could increase or decrease when the regret factor varies.",

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AB - We study the optimal output of a competitive firm under price uncertainty. Instead of assuming a risk-averse firm, we assume that the firm is regret-averse. We find that optimal output under uncertainty would be lower than under certainty. We also prove that optimal output could increase or decrease when the regret factor varies.

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Optimal output for the regret-averse competitive firm under price uncertainty

Abstract

All Science Journal Classification (ASJC) codes

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