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Regret Aversion, Regret Neutrality, and Risk Aversion in Production
| Content Provider | Scilit |
|---|---|
| Author | Guo, Xu Wong, Wing-Keung |
| Copyright Year | 2017 |
| Description | Journal: Ssrn Electronic Journal Previous studies focus on the comparison of the optimal output levels of regret-averse firms under uncertainty and firms under certainty. This paper extends the theory by investigating the effects of both regret-aversion and regret-neutrality on production. We compare the optimal output levels of both regret-averse and regret-neutral firms with purely risk-averse firms under uncertainty and firms under certainty. We first show that the regret-neutral firms will surely produce more than its purely risk-averse counterparts and surely produce less than firms under certainty. Thereafter, we give sufficient conditions to ensure the regret-averse firms to produce more than both purely risk-averse and regret-neutral counterparts and study the comparative statics of the optimal production. We also develop properties of regret-aversion on production in a binary model. The finding in this paper is useful for production managers in their decision on the production. |
| Related Links | http://www3.ntu.edu.sg/hss2/egc/wp/2017/2017-09.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3037925 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3037925 |
| Journal | Ssrn Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2017-09-16 |
| Access Restriction | Open |
| Subject Keyword | Journal: Ssrn Electronic Journal Regret Neutral Risk Averse Averse Firms Purely Risk Regret Averse |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
