Theory of the firm facing uncertain demand revisited

Arthur HAU

doi:10.1007/s00199-003-0417-9

Theory of the firm facing uncertain demand revisited

Arthur HAU

Department of Management

Research output: Journal Publications › Journal Article (refereed) › peer-review

7 Citations (Scopus)

Abstract

Empirical evidence shows that the Principle of Increasing Uncertainty (PIU) introduced by Leland is easily violated. Necessary and sufficient conditions, without relying on the PIU assumption, under which risk-averse monopolistic producers reduce their output levels upon the introduction of the Leland-type demand uncertainty are derived.

Original language	English
Pages (from-to)	457-464
Number of pages	8
Journal	Economic Theory
Volume	24
Issue number	2
DOIs	https://doi.org/10.1007/s00199-003-0417-9
Publication status	Published - Aug 2004

Funding

Financial support from the Academic Programme Research Grants (Business Programme) of Lingnan University Ref.# DB01A3 (Res201/Bus003) is gratefully acknowledged.

Keywords

Leland-type demand uncertainty
Principle of increasing uncertainty
Quantity-setting monopolistic firm
Single-crossing property

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10.1007/s00199-003-0417-9

Cite this

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abstract = "Empirical evidence shows that the Principle of Increasing Uncertainty (PIU) introduced by Leland is easily violated. Necessary and sufficient conditions, without relying on the PIU assumption, under which risk-averse monopolistic producers reduce their output levels upon the introduction of the Leland-type demand uncertainty are derived.",

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AB - Empirical evidence shows that the Principle of Increasing Uncertainty (PIU) introduced by Leland is easily violated. Necessary and sufficient conditions, without relying on the PIU assumption, under which risk-averse monopolistic producers reduce their output levels upon the introduction of the Leland-type demand uncertainty are derived.

KW - Leland-type demand uncertainty

KW - Principle of increasing uncertainty

KW - Quantity-setting monopolistic firm

KW - Single-crossing property

UR - https://www.scopus.com/pages/publications/3142780494

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DO - 10.1007/s00199-003-0417-9

M3 - Journal Article (refereed)

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VL - 24

SP - 457

EP - 464

JO - Economic Theory

JF - Economic Theory

IS - 2

ER -

Theory of the firm facing uncertain demand revisited

Abstract

Funding

Keywords

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