Price Stabilization and the Risk-Averse Firm

An analytically simple and tractable approach to firm-level welfare analysis of complete and partial mean-preserving price stabilization for producers with general risk-averse preferences facing a stochastic technology is developed. Necessary and sufficient conditions for price stabilization to be w...

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Veröffentlicht in:	American journal of agricultural economics 2003-05, Vol.85 (2), p.336-347
Hauptverfasser:	Chambers, Robert G., Quiggin, John
Format:	Artikel
Sprache:	eng
Schlagworte:	Agricultural economics Cost structure duality Economics Enterprises Expected utility Income distribution Mathematical methods Maximin Price stabilization Prices Production functions Property taxes Q120 Q140 Risk Risk aversion Risk aversion preference Self insurance state-contingent technology Stochastic models Supply Supply curves Technology Uncertainty Utility functions
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Beschreibung
Zusammenfassung:	An analytically simple and tractable approach to firm-level welfare analysis of complete and partial mean-preserving price stabilization for producers with general risk-averse preferences facing a stochastic technology is developed. Necessary and sufficient conditions for price stabilization to be welfare enhancing are derived under different assumptions of the producer's preferences and the producer's technology. Existing stabilization results for the risk-averse firm are shown to be corollaries of these more general results.
ISSN:	0002-9092 1467-8276
DOI:	10.1111/1467-8276.00123