Consider a simple two-state risk with equal probabilities for the two states. In particular, assume that the random … way, we can extend and generalize existing results about risk attitudes. This lottery preference includes behavior … exhibiting higher order risk effects, such as precautionary effects and tempering effects. …

uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable …

. For example, the nature of monotonicity of the indifference curve depends on the underlying mean. Price hedging decisions … hedging decisions within the prospect theory. We illustrate our general considerations with a thoroughly worked out example. …

This paper studies the impact of counter-party default risk of forward contracts on a firm's production and hedging … decisions. Using a model of a risk-averse competitive firm under price uncertainty, it derives several fundamental results. If … expected profits from forward contracts are zero, the hedge ratio is surprisingly not affected by default risk under general …

this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain … costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the …

The optimum behavior of a competitive risk-averse international trader who supplies or demands commodities invoiced in … foreign currency is examined when his profits are subject to several forms of risk: production, domestic cost, the exchange … and the double hedging theorems are derived. The behavior of the same firm with and without complete markets is compared …