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Econometric Tests Of Firm Decision Making Under Uncertainty: Optimal Output And Hedging Decisions

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  • Park, Timothy A.
  • Antonovitz, Frances

Abstract

The competitive firm under price uncertainty which hedges and faces basic risk is examined. Assuming constant absolute risk aversion, reciprocity conditions linking optimal output, hedging, and input decisions and leading to testable econometric restrictions are derived. The theoretical model is empirically tested with data from a large California feedlot.

Suggested Citation

  • Park, Timothy A. & Antonovitz, Frances, 1991. "Econometric Tests Of Firm Decision Making Under Uncertainty: Optimal Output And Hedging Decisions," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271264, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea91:271264
    DOI: 10.22004/ag.econ.271264
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    References listed on IDEAS

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    Cited by:

    1. Arshanapalli, Bala G. & Gupta, Omprakash K., 1996. "Optimal hedging under output price uncertainty," European Journal of Operational Research, Elsevier, vol. 95(3), pages 522-536, December.
    2. Liu, Yucan & Shumway, C. Richard, 2005. "Empirical Tests of the Refutable Implications of Expected Utility Maximization under Risk," 2005 Annual meeting, July 24-27, Providence, RI 19331, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Liu, Yucan & Shumway, C. Richard, 2005. "Indirect Utility Maximization under Risk: A Heterogeneous Panel Application," 2005 Annual Meeting, July 6-8, 2005, San Francisco, California 36307, Western Agricultural Economics Association.

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