RESOURCE ALLOCATION AND ASSET PRICING

Robert G Chambers () and John Quiggin ()

No 28571, Working Papers from University of Maryland, Department of Agricultural and Resource Economics

Abstract: This paper presents a unified treatment of the production and financial decisions available to a firm facing frictionless financial markets and a stochastic production technology under minimal assumptions on the firm's stochastic technology and objective function. The key concept is that of a ‘derivative-cost function’, which gives the minimal cost (maximal buying price) of constructing an asset by combining financial and real production activities.

Keywords: Demand and Price Analysis (search for similar items in EconPapers)
Date: 2002
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Working Paper: RESOURCE ALLOCATION AND ASSET PRICING (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:ags:umdrwp:28571

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