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 journalJournal articlepeer-review

    13 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 - 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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