Production decisions in the presence of options

Yaffa Machnes

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

A competitive firm which exports its output faces uncertainty regarding the exchange rate. The introduction of an actuarially fair option reduces the variance of profits and results in every risk averse firm increasing output and exports. This result holds true also for the industry when we permit the entrance of new firms.

Original languageEnglish
Pages (from-to)341-345
Number of pages5
JournalInternational Review of Economics and Finance
Volume1
Issue number4
DOIs
StatePublished - 1992

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