Abstract
A firm faces two independent sources of risk: uncertain demand and the background risk to its assets. We show that certainty equivalent behavior occurs in the case of monotone likelihood ratio shifts of the distribution of each of the two sources of risk.
Original language | English |
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Pages (from-to) | 299-302 |
Number of pages | 4 |
Journal | Insurance: Mathematics and Economics |
Volume | 13 |
Issue number | 3 |
DOIs | |
State | Published - Dec 1993 |
Keywords
- Likelihood ratio shifts
- Production