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Theory of the Firm Facing Uncertain Demand

Hayne E. Leland
- 01 Jan 1972 - 
- Vol. 62, Iss: 3, pp 278-291
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This article is published in The American Economic Review.The article was published on 1972-01-01 and is currently open access. It has received 597 citations till now. The article focuses on the topics: Capital call & Demand-pull theory.

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Citations
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Investment and Demand Uncertainty

TL;DR: In this paper, the authors investigated the effects of uncertainty on investment decisions of a sample of Italian manufacturing firms, using information on the subjective probability distribution of future demand for firms' products according to the entrepreneurs.
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Duopoly information equilibrium: Cournot and bertrand

TL;DR: In this paper, it is shown that if the goods are substitutes (not) to share information is a dominant strategy for each firm in Bertrand (Cournot) competition, then the market outcome is always optimal.
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The effects of price and cost uncertainty on investment

TL;DR: In this paper, the authors examined the effects of increased uncertainty in future output prices, wage rates, and investment costs on the quantity of investment undertaken by a firm and found that current investment does not decrease with increased uncertainty.
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The Effect of Exchange Rate Uncertainty on the Prices and Volume of International Trade

TL;DR: In this article, the theoretical impact of exchange risk on both equilibrium prices and quantities is analyzed for several empirical cases of 1965-1975 U.S. and German trade and it is found that exchange rate uncertainty has had a significant impact on prices but no significant effect on the volume of trade.
References
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Capital asset prices: a theory of market equilibrium under conditions of risk*

TL;DR: In this paper, the authors present a body of positive microeconomic theory dealing with conditions of risk, which can be used to predict the behavior of capital marcets under certain conditions.
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Risk Aversion in the Small and in the Large

John W. Pratt
- 01 Jan 1964 - 
TL;DR: In this article, a measure of risk aversion in the small, the risk premium or insurance premium for an arbitrary risk, and a natural concept of decreasing risk aversion are discussed and related to one another.
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Liquidity Preference as Behavior towards Risk

TL;DR: In this article, the authors derived the liquidity preference schedule from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.
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Increasing risk: I. A definition

TL;DR: The authors tried to answer the question: When is a random variable Y "more variable" than another random variable X "less variable" by asking when a variable X is more variable than another variable Y.