Production Economics in the Presence of Risk

24 Pages Posted: 14 Sep 2012

See all articles by Sriram Shankar

Sriram Shankar

Australian National University (ANU) - ANU Centre for Social Research and Methods

Date Written: October 2012

Abstract

This paper provides an overview of the literature on production under the influence of risk. Various specifications of stochastic production function such as models with additive and multiplicative uncertainty, Just and Pope model, output‐cubical, state‐allocable and state‐general models are discussed. Further, criteria determining optimal producer behaviour are derived for deterministic production technology and for various kinds of state‐contingent technologies such as output‐cubical, state‐specific, state‐allocable and state‐general technologies. Finally, a brief discussion is presented about the drawbacks of each of these specifications of technology.

Keywords: output‐cubical, risk‐neutral, state‐allocable

Suggested Citation

Shankar, Sriram, Production Economics in the Presence of Risk (October 2012). Australian Journal of Agricultural and Resource Economics, Vol. 56, Issue 4, pp. 597-620, 2012, Available at SSRN: https://ssrn.com/abstract=2146436 or http://dx.doi.org/10.1111/j.1467-8489.2012.00600.x

Sriram Shankar (Contact Author)

Australian National University (ANU) - ANU Centre for Social Research and Methods ( email )

Beryl Rawson Building (13)
Canberra, ACT 0200
Australia

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