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Imperfect Competition Under Uncertainty

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  • Fishelson, Gideon

Abstract

The behavior of firms in the Cournot-Nash model is examined under uncertainty in market demand and in their production. The emerging result is that if one of the firms is strongly more risk averse than the other its output will increase but total output declines (even when the other is risk neutral). In the Stackelberg model however if the follower is risk neutral he might compensate for the decline of output by the leader.

Suggested Citation

  • Fishelson, Gideon, 1988. "Imperfect Competition Under Uncertainty," Foerder Institute for Economic Research Working Papers 275451, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275451
    DOI: 10.22004/ag.econ.275451
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    File URL: https://ageconsearch.umn.edu/record/275451/files/TEL-AVIV-FSWP-128.pdf
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    References listed on IDEAS

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    1. Stewart, Marion B, 1978. "Factor-Price Uncertainty with Variable Proportions," American Economic Review, American Economic Association, vol. 68(3), pages 468-473, June.
    2. Fishelson, Gideon, 1984. "Constraints on transactions in the futures markets for output and inputs," Journal of Economics and Business, Elsevier, vol. 36(4), pages 415-420, December.
    3. Hartman, Richard, 1975. "Competitive Firm and the Theory of Input Demand under Price Uncertainty: Comment," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1289-1290, December.
    4. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    5. Blair, Roger D, 1974. "Random Input Prices and the Theory of the Firm," Economic Inquiry, Western Economic Association International, vol. 12(2), pages 214-226, June.
    6. Fishelson, Gideon, 1986. "On the behavior of a noncompetitive firm when the supplies of inputs are random," Journal of Economics and Business, Elsevier, vol. 38(4), pages 331-339, December.
    7. Gershon Feder & Richard E. Just & Andrew Schmitz, 1980. "Futures Markets and the Theory of the Firm under Price Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 317-328.
    8. Holthausen, Duncan M, 1979. "Hedging and the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 69(5), pages 989-995, December.
    9. Das, Satya P, 1980. "Further Results in Input Choices under Uncertain Demand," American Economic Review, American Economic Association, vol. 70(3), pages 528-532, June.
    10. Turnovsky, Stephen J, 1973. "Production Flexibility, Price Uncertainty and the Behavior of the Competitive Firm," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 395-413, June.
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    Cited by:

    1. Fishelson, Gideon, 1989. "Allocation of a Product Between Two Markets, Under Uncertainty," Foerder Institute for Economic Research Working Papers 275473, Tel-Aviv University > Foerder Institute for Economic Research.

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    Keywords

    Financial Economics; Risk and Uncertainty;

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