Comparison of the production behavior of regret-averse and purely risk-averse firms
Abstract: Previous studies focused on the comparison of the optimal output levels of regret- averse firms under uncertainty and 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-a...
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| Lenguaje: | English |
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Universidad de Chile. Departamento de Economía
2019
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oai:scielo:S0718-528620190002001572020-01-07Comparison of the production behavior of regret-averse and purely risk-averse firmsGuo,XuWong,Wing-Keung Production regret aversion risk aversion uncertainty Abstract: Previous studies focused on the comparison of the optimal output levels of regret- averse firms under uncertainty and 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 under certainty. We first show that the linear-regret firms will surely produce more than their purely risk-averse counterparts and surely produce less than firms under certainty. Thereafter, we give sufficient conditions to ensure the regret-averse firms to produce more than the purely risk-averse counterparts and study the comparative statics of the optimal production. We also develop properties of regret-aversion on production.info:eu-repo/semantics/openAccessUniversidad de Chile. Departamento de EconomíaEstudios de economía v.46 n.2 20192019-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862019000200157en10.4067/S0718-52862019000200157 |
| institution |
Scielo Chile |
| collection |
Scielo Chile |
| language |
English |
| topic |
Production regret aversion risk aversion uncertainty |
| spellingShingle |
Production regret aversion risk aversion uncertainty Guo,Xu Wong,Wing-Keung Comparison of the production behavior of regret-averse and purely risk-averse firms |
| description |
Abstract: Previous studies focused on the comparison of the optimal output levels of regret- averse firms under uncertainty and 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 under certainty. We first show that the linear-regret firms will surely produce more than their purely risk-averse counterparts and surely produce less than firms under certainty. Thereafter, we give sufficient conditions to ensure the regret-averse firms to produce more than the purely risk-averse counterparts and study the comparative statics of the optimal production. We also develop properties of regret-aversion on production. |
| author |
Guo,Xu Wong,Wing-Keung |
| author_facet |
Guo,Xu Wong,Wing-Keung |
| author_sort |
Guo,Xu |
| title |
Comparison of the production behavior of regret-averse and purely risk-averse firms |
| title_short |
Comparison of the production behavior of regret-averse and purely risk-averse firms |
| title_full |
Comparison of the production behavior of regret-averse and purely risk-averse firms |
| title_fullStr |
Comparison of the production behavior of regret-averse and purely risk-averse firms |
| title_full_unstemmed |
Comparison of the production behavior of regret-averse and purely risk-averse firms |
| title_sort |
comparison of the production behavior of regret-averse and purely risk-averse firms |
| publisher |
Universidad de Chile. Departamento de Economía |
| publishDate |
2019 |
| url |
http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862019000200157 |
| work_keys_str_mv |
AT guoxu comparisonoftheproductionbehaviorofregretaverseandpurelyriskaversefirms AT wongwingkeung comparisonoftheproductionbehaviorofregretaverseandpurelyriskaversefirms |
| _version_ |
1714205053713121280 |