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difference in stochastic costs of location across regions. A comparative static analysis shows that capital allocation depends … to the expected utility approach. The impact of changes in distribution parameters, such as the expected costs of … location, the variance of costs of location and the correlation between locational costs, can be fully characterized via the …
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The competitive allocation of labor across different sectors of an economy may not be socially optimal when one sector uses foreign capital. We argue that a suitably designed government intervention is required to restrict the sectors to their optimal size and maximize national welfare. Such a...
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The paper revisits the impact of uncertainty on the decision problem of a bank. The bank extends risky loans to private investors and sells deposits to savers at fixed rates. The uncertainty under which deposit/loan-portfolios are chosen by banks is endogenized through an information system that...
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We study the impact of transparency in a commodity market on the decision problem of a competitive firm under price uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable signals which are correlated with the random...
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