ISSN:
1554-9658
Keywords:
reserve goods
;
self-protection
;
insurance
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract We consider a risk-averse firm producing a limited number of goods that can be defective. The firm must determine its level of production before knowing which goods will be defective. Such is the case, for example, for a producer of telecommunications satellites. The problem under scrutiny can be interpreted as a generalization of self-protection for more than two states of nature. In our model, the firm determines jointly its level of production and its demand for insurance. It is shown that, under reasonable assumptions, the two strategies are complements.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1008797407679
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