Title

Theory of the firm facing uncertain demand revisited

Document Type

Journal article

Source Publication

Economic Theory

Publication Date

8-1-2004

Volume

24

Issue

2

First Page

457

Last Page

464

Keywords

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

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.

DOI

10.1007/s00199-003-0417-9

Print ISSN

09382259

Funding Information

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

Publisher Statement

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Hau, A. (2004). Theory of the firm facing uncertain demand revisited. Economic Theory, 24(2), 457-464. doi: 10.1007/s00199-003-0417-9

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