Dual structures for the sole-proprietorship firm

Robert Chambers () and John Quiggin

No WPR03_6, Risk & Uncertainty Working Papers from Risk and Sustainable Management Group, University of Queensland

Abstract: This paper presents a dual representation of firm-level and market-level equilibrium behavior for a sole proprietorship economy with competitive and frictionless financial markets and stochastic production opportunities in a two-period setting. The dual equilibrium model is used to state conditions for the firms' production choices to be independent of their risk preferences in equilibrium. These conditions entail Pareto optimality, but do not require either that the firm's consumption choices lie within the span of financial markets or the assumption of an extreme version of linear risk tolerance.

Keywords: state-contingent; production (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2003-12
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Citations: View citations in EconPapers (1)

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Working Paper: Dual structures for the sole-proprietorship firm (2003)
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