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Article: Regret Theory and the Competitive Firm Revisited
Title | Regret Theory and the Competitive Firm Revisited |
---|---|
Authors | |
Keywords | Production Regret theory Uncertainty |
Issue Date | 2016 |
Publisher | Springer. The Journal's web site is located at http://www.springer.com/economics/journal/40822 |
Citation | Eurasian Economic Review, 2016, v. 6 n. 3, p. 481-487 How to Cite? |
Abstract | This paper revisits the impact of regret aversion on the behavior of the competitive firm under price uncertainty. We show that the firm optimally produces more (less) when regret aversion prevails if the random output price is positively (negatively) skewed. In this case, high (low) output prices are much more likely to be seen than low (high) output prices. To avoid 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 how regret aversion affects the firm's production decision. |
Persistent Identifier | http://hdl.handle.net/10722/237063 |
ISSN | 2023 Impact Factor: 2.5 2023 SCImago Journal Rankings: 0.467 |
ISI Accession Number ID |
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 | 2016-12-20T06:15:46Z | - |
dc.date.available | 2016-12-20T06:15:46Z | - |
dc.date.issued | 2016 | - |
dc.identifier.citation | Eurasian Economic Review, 2016, v. 6 n. 3, p. 481-487 | - |
dc.identifier.issn | 1309-422X | - |
dc.identifier.uri | http://hdl.handle.net/10722/237063 | - |
dc.description.abstract | This paper revisits the impact of regret aversion on the behavior of the competitive firm under price uncertainty. We show that the firm optimally produces more (less) when regret aversion prevails if the random output price is positively (negatively) skewed. In this case, high (low) output prices are much more likely to be seen than low (high) output prices. To avoid 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 how regret aversion affects the firm's production decision. | - |
dc.language | eng | - |
dc.publisher | Springer. The Journal's web site is located at http://www.springer.com/economics/journal/40822 | - |
dc.relation.ispartof | Eurasian Economic Review | - |
dc.rights | The final publication is available at Springer via http://dx.doi.org/10.1007/s40822-016-0053-x | - |
dc.subject | Production | - |
dc.subject | Regret theory | - |
dc.subject | Uncertainty | - |
dc.title | Regret Theory and the Competitive Firm Revisited | - |
dc.type | Article | - |
dc.identifier.email | Wong, KP: kpwong@econ.hku.hk | - |
dc.identifier.authority | Wong, KP=rp01112 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1007/s40822-016-0053-x | - |
dc.identifier.scopus | eid_2-s2.0-85028065911 | - |
dc.identifier.hkuros | 270852 | - |
dc.identifier.volume | 6 | - |
dc.identifier.issue | 3 | - |
dc.identifier.spage | 481 | - |
dc.identifier.epage | 487 | - |
dc.identifier.isi | WOS:000403683500006 | - |
dc.publisher.place | Germany | - |
dc.identifier.issnl | 1309-422X | - |