The main result of the paper is that policy reversals are more likely floowing realization of extreme and relatively unlikely values of parameters that map policy choice into outcomes. A corollary to this result is that policy reversals occur infrequently.

We study the optimal decisions regarding production and hedging of a competitive firm under price uncertainty. The firm faces asymmetric tax and has access to futures markets.

This paper argues that when organizations are imperfect in the sense that members may make mistakes and messages may be distorted, then the inner structure of the organization should be explicitly modeled. This paper proposes a framework for studying games between imperfect organizations.