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

Martín Egozcue, Xu Guo, Wing Keung WONG*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)

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 languageEnglish
Pages (from-to)279-295
Number of pages17
JournalEurasian Economic Review
Volume5
Issue number2
DOIs
Publication statusPublished - 1 Dec 2015

Scopus Subject Areas

  • Economics, Econometrics and Finance(all)

User-Defined Keywords

  • Competitive firm
  • Decision making
  • Optimal output
  • Regret aversion
  • Risk aversion

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