We show that the increase in price riskiness reduces the optimal output under increasing absolute risk aversion. That is, the marginal impact of the risk on output is independent of the type of absolute risk aversion (decreasing, constant, or increasing).

Using a general framework and a multiple-input technology, we thoroughly investigate the hedging and production decisions under cost uncertainty. In doing so, we show the impact of the cost risk on the optimal output, hedge and hedge ratio. Copyright © 2006 John Wiley & Sons, Ltd.

This book introduces new theoretical foundations under uncertainty with applications.

This book introduces new theoretical foundations under uncertainty with applications (Nova Science Publishers Inc., NY, 2007).

When modeling output uncertainty, the multiplicative specification is consistently chosen over the additive form, despite the latter being arguably intuitively more obvious. The rationale for this seems to be that when production risk is the only source of uncertainty, additive uncertainty does...

We implement the theoretical models of input hedging. In doing so, we provide decisive results regarding the marginal impact of the basis risk on the optimal hedge, hedge ratio and hedge position.

This paper extends the existing estimation methods to allow empirical estimation and hypothesis testing under joint production and price uncertainty. Our approach modifies and expands the use of duality theory. Furthermore, our approach does not require the specification or estimation of the...

Without relying on duality theory and the indirect utility function, an estimation method is devised that accommodates both price and output uncertainty. This method enables easy testing for risk neutrality. Moreover, it enables empirical comparative statics results to be derived that can be...