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

Martín Egozcue, Xu Guo and Wing-Keung Wong ()

Eurasian Economic Review, 2015, vol. 5, issue 2, 279-295

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. Copyright Eurasia Business and Economics Society 2015

Keywords: Optimal output; Competitive firm; Risk aversion; Regret aversion; Decision making; D00; D03; D21 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Optimal Output for the Regret-Averse Competitive Firm Under Price Uncertainty (2013) Downloads
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