CERTAINTY EQUIVALENT PRICES AND PRODUCER WELFARE UNDER OUTPUT PRICE UNCERTAINTY

Yacov Tsur and David Zilberman

No 13562, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Producer welfare indices under price uncertainty are derived using the concept of certainty equivalent prices. In this approach the marginal cost function is used instead of the ex-ante supply function; the effects of uncertainty and risk preference are captured by certainty equivalent prices. Implications for welfare evaluation are discussed.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 15
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:13562

DOI: 10.22004/ag.econ.13562

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