I use a flexible price version of the Prescott (1975) “hotels” model to study a dynamic model that allows for storage … not important. The cost of delay is also relevant for price dispersion: Lower cost of delays may lead to lower price …

. -- Background risk ; Capital structure ; Price uncertainty …This paper examines the interplay between the real and financial decisions of the competitive firm under output price … uncertainty. The firm faces additional sources of uncertainty that are aggregated into a background risk. We show that the firm …

. For example, the nature of monotonicity of the indifference curve depends on the underlying mean. Price hedging decisions …. -- Prospect theory ; mean-variance model ; indifference curve ; price uncertainty ; hedging …

Within the prospect theory the paper examines production and hedging decisions of a competitive firm under price … theory, mean-variance model, price uncertainty …