Burness, H. Stuart (1978) Price uncertainty and the exhaustive firm. Journal of Environmental Economics and Management, 5 (2). pp. 128-149. ISSN 0095-0696. doi:10.1016/0095-0696(78)90023-2. https://resolver.caltech.edu/CaltechAUTHORS:20171121-162817267
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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).
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| 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. | ||||||||||||
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| Issue or Number: | 2 | ||||||||||||
| DOI: | 10.1016/0095-0696(78)90023-2 | ||||||||||||
| Record Number: | CaltechAUTHORS:20171121-162817267 | ||||||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20171121-162817267 | ||||||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||||||||
| ID Code: | 83417 | ||||||||||||
| Collection: | CaltechAUTHORS | ||||||||||||
| Deposited By: | Jacquelyn Bussone | ||||||||||||
| Deposited On: | 22 Nov 2017 17:26 | ||||||||||||
| Last Modified: | 15 Nov 2021 19:57 |
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