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Production and savings under uncertainty

✍ Scribed by Atanu Saha; Robert Innes; Rulon Pope


Book ID
113410268
Publisher
Elsevier Science
Year
1993
Tongue
English
Weight
689 KB
Volume
2
Category
Article
ISSN
1059-0560

No coin nor oath required. For personal study only.


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This article introduces Knightian uncertainty into the production and futures hedging framework. The firm has imprecise information about the probability density function of spot or futures prices in the future. Decision-making under such scenario follows the "max-min" principle. It is shown that in