Characterization by prices of optimal programs under uncertainty
β Scribed by Itzhak Zilcha
- Publisher
- Elsevier Science
- Year
- 1976
- Tongue
- English
- Weight
- 617 KB
- Volume
- 3
- Category
- Article
- ISSN
- 0304-4068
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This paper examines the optimal twoβpart pricing under cost uncertainty. We consider a riskβaverse monopolistic firm that is subject to a cost shock to its constant marginal cost of production. The firm uses twoβpart pricing to sell its output to a continuum of heterogeneous consumers. We show that
## Abstract In most industrial applications the linear model used for optimization by linear programming involves significant uncertainties and inaccuracies in the model parameters. This paper presents a framework which allows uncertainties in the matrix elements of the linear program to be taken i