. 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 …,sigma)-preference. In contrast to the literature our findings show that the production under uncertainty can be larger than in the certainty … theory, mean-variance model, price uncertainty …

In this paper, we study a new channel to explain firms' price setting behavior. We propose that uncertainty about … deviation increase in oil price volatility leads to a 0.38 percent increase in the markup of firms with average oil exposure. …

This note examines the behavior of a competitive firm that faces joint price and inflation risk. Given that the price …, banning the firm from forward trading may induce the firm to produce more or less, depending on whether the price risk premium … is positive or negative, respectively. While the price risk premium is unambiguously negative in the absence of the …

-averse firms to produce more than the purely risk-averse counterparts and study the comparative statics of the optimal production … firms under certainty. This paper extends the theory by further investigating the effects of regret-aversion on production …. We compare the optimal output levels of regret-averse firms with purely risk- averse firms under uncertainty and firms …

This paper analyzes the optimal adjustment strategy of an inventory-holding firm facing price- and quantity …-adjustment costs in an inflationary environment. The model nests both the original menu-cost model that allows production to be … costlessly adjusted, and the later model that includes price- and quantity-adjustment costs, but rules out inventory holdings. It …

If increased capital purchases lowers a firm's after-tax price of capital, the firm's marginal product of capital can …