Alghalith, Moawia and Niu, Cuizhen and Wong, WingKeung (2017): The impacts of joint energy and output prices uncertainties in a meanvariance framework. Forthcoming in: Theoretical Economics Letters

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Abstract
In this paper, we analyze the impacts of joint energy and output prices uncertainties on the inputs demands in a meanvariance framework. We find that the concepts of elasticities and variance vulnerability play important roles in the comparative statics analysis. If the firms' preferences exhibit variance vulnerability, increasing the variance of energy price will necessarily cause the risk averse firm to decrease the demands for the nonrisky inputs. Further, we investigate two special cases with only uncertain energy price and only uncertain output price. In the case with only uncertain energy price, we find that the uncertain energy price has no impact on the demands for the nonrisky inputs. Besides, if the firms' preferences exhibit variance vulnerability, increasing the variance of energy price will surely cause the risk averse firm to decrease the demand for energy.
Item Type:  MPRA Paper 

Original Title:  The impacts of joint energy and output prices uncertainties in a meanvariance framework 
English Title:  The impacts of joint energy and output prices uncertainties in a meanvariance framework 
Language:  English 
Keywords:  Price Uncertainty, MeanVariance, Energy price, Risk 
Subjects:  D  Microeconomics > D8  Information, Knowledge, and Uncertainty > D81  Criteria for DecisionMaking under Risk and Uncertainty 
Item ID:  79739 
Depositing User:  WingKeung Wong 
Date Deposited:  17 Jun 2017 02:49 
Last Modified:  30 Sep 2019 02:17 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/79739 