Theory of the Firm with Joint Price and Output Risk and a Forward Market
Expected utility maximizing farmers facing just price risk or both price risk and quantity risk behave similarly in the absence of a forward market. If forward contracting is possible, that is not true because variation in the commodity price affects a farmer's wealth through the value of his f...
Veröffentlicht in: | American Journal of Agricultural Economics. - Oxford University Press. - 67(1985), 3, Seite 630-635 |
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1. Verfasser: | |
Format: | Online-Aufsatz |
Sprache: | English |
Veröffentlicht: |
1985
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Zugriff auf das übergeordnete Werk: | American Journal of Agricultural Economics |
Schlagworte: | forward markets futures markets risk theory of the firm uncertainty Economics Business Biological sciences Mathematics |
Zusammenfassung: | Expected utility maximizing farmers facing just price risk or both price risk and quantity risk behave similarly in the absence of a forward market. If forward contracting is possible, that is not true because variation in the commodity price affects a farmer's wealth through the value of his futures position, the value of his output and through the covariance between price and output. This covariance affects a farmer's optimal scale of production, his optimal forward position and the interrelationship between the scale of production and forward trading. |
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ISSN: | 14678276 |
DOI: | 10.2307/1241086 |