Buying and selling behavior in stochastic environments with backstop markets

DOI10.1007/BF01239120MaRDI QIDQ749419zbMATH OpenOpenAlexFDO

Authors Karl-Gustaf Löfgren

Publication date 1989

Published in Journal of Economics (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/bf01239120

zbMATH Keywords

backstop marketsstochastic marketstochastic supply curve

Mathematics Subject Classification ID

Microeconomic theory (price theory and economic markets) (91B24) Auctions, bargaining, bidding and selling, and other market models (91B26)

Review text

The main body of this paper contains a theoretical analysis of the behavior of a firm (a buyer) facing a stochastic supply curve for its input, but in addition has access to (deterministic) backstop markets, where it can buy its input after the realization in the ordinary stochastic market is known. It is shown that some of the ranking results of \textit{K.-G. Löfgren} and \textit{B. Ranneby} [Scand. J. Econ. 89, 39-54 (1987; Zbl 0616.90009)] can be proved under more general conditions.

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Cites work

• Behavioral Modes for a Firm Facing an Uncertain Supply or Demand Curve
• Demand Uncertainty in Imperfect Competition
• Optimal monopolistic strategy under demand uncertainty
• Theory of the firm: uncertainty and choice of experiments

Cited in

(3)

• Supply theory sans profit maximization
• TIMBER SUPPLY UNDER DEMAND UNCERTAINTY: WELFARE GAINS FROM PERFECT COMPETITION WITH RATIONAL EXPECTATIONS
• Behavioral Modes for a Firm Facing an Uncertain Supply or Demand Curve

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