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Article: Regret Aversion and Asymmetric Price Distribution
Title | Regret Aversion and Asymmetric Price Distribution |
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Authors | |
Keywords | Production Regret aversion Risk aversion Skewness |
Issue Date | 2020 |
Publisher | Elsevier Ltd. The Journal's web site is located at http://www.elsevier.com/journals/the-journal-of-economic-asymmetries/1703-4949 |
Citation | Journal of Economic Asymmetries, 2020, v. 21, p. article no. e00156 How to Cite? |
Abstract | This paper examines the economic asymmetries between a regret-averse firm and a risk-averse firm under price uncertainty. We show that the global and marginal effects of price uncertainty on production are both positive (negative) when regret aversion prevails if the random output price is asymmetrically distributed with positive (negative) skewness. In this case, high (low) output prices are much more likely to be seen than low (high) output prices. To minimize regret, the firm is induced to raise (lower) its output optimal level. The skewness of the price distribution as such plays a pivotal role in determining the regret-averse firm's production decision under price uncertainty. |
Description | Link to Free access |
Persistent Identifier | http://hdl.handle.net/10722/280957 |
ISSN | 2023 SCImago Journal Rankings: 0.654 |
DC Field | Value | Language |
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dc.contributor.author | Broll, U | - |
dc.contributor.author | Welzel, P | - |
dc.contributor.author | Wong, KP | - |
dc.date.accessioned | 2020-02-25T07:43:15Z | - |
dc.date.available | 2020-02-25T07:43:15Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | Journal of Economic Asymmetries, 2020, v. 21, p. article no. e00156 | - |
dc.identifier.issn | 1703-4949 | - |
dc.identifier.uri | http://hdl.handle.net/10722/280957 | - |
dc.description | Link to Free access | - |
dc.description.abstract | This paper examines the economic asymmetries between a regret-averse firm and a risk-averse firm under price uncertainty. We show that the global and marginal effects of price uncertainty on production are both positive (negative) when regret aversion prevails if the random output price is asymmetrically distributed with positive (negative) skewness. In this case, high (low) output prices are much more likely to be seen than low (high) output prices. To minimize regret, the firm is induced to raise (lower) its output optimal level. The skewness of the price distribution as such plays a pivotal role in determining the regret-averse firm's production decision under price uncertainty. | - |
dc.language | eng | - |
dc.publisher | Elsevier Ltd. The Journal's web site is located at http://www.elsevier.com/journals/the-journal-of-economic-asymmetries/1703-4949 | - |
dc.relation.ispartof | Journal of Economic Asymmetries | - |
dc.rights | This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. | - |
dc.subject | Production | - |
dc.subject | Regret aversion | - |
dc.subject | Risk aversion | - |
dc.subject | Skewness | - |
dc.title | Regret Aversion and Asymmetric Price Distribution | - |
dc.type | Article | - |
dc.identifier.email | Wong, KP: kpwongc@hkucc.hku.hk | - |
dc.identifier.authority | Wong, KP=rp01112 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1016/j.jeca.2020.e00156 | - |
dc.identifier.scopus | eid_2-s2.0-85079389016 | - |
dc.identifier.hkuros | 309235 | - |
dc.identifier.volume | 21 | - |
dc.identifier.spage | article no. e00156 | - |
dc.identifier.epage | article no. e00156 | - |
dc.publisher.place | United Kingdom | - |
dc.identifier.issnl | 1703-4949 | - |