Comparative statics for state-contingent technologies

The implications of supermodularity conditions in comparative-static analysis are analyzed for a generalized version of the separable-effort representation of a firm facing stochastic prices and a stochastic technology. Previous analysis is generalized in two ways. General risk-averse, as opposed to...

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Bibliographic Details
Published inJournal of economics (Vienna, Austria) Vol. 93; no. 2; pp. 203 - 214
Main Authors Chambers, R. G., Quiggin, J.
Format Journal Article
LanguageEnglish
Published Vienna Springer-Verlag 01.03.2008
Springer Vienna
Springer Nature B.V
Subjects
Agricultural economics
Commercial production
Correspondence
Cost functions
Cost structure
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economic uncertainty
Economics
Economics and Finance
Game Theory
Macroeconomics/Monetary Economics//Financial Economics
Microeconomics
Objective functions
Price stabilization
Production functions
Public Finance
Risk aversion
Social and Behav. Sciences
Stochastic models
Studies
Technology
Utility functions
Written correspondence
risk aversion
supermodularity
D21
D81
production
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Summary:The implications of supermodularity conditions in comparative-static analysis are analyzed for a generalized version of the separable-effort representation of a firm facing stochastic prices and a stochastic technology. 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.
ISSN:0931-8658
1617-7134
DOI:10.1007/s00712-007-0291-1