An Empirical Multi-Output Production Decision Model for the Profit Maximizing Multiproduct Firm

Vorotnikova, Ekaterina; Asci, Serhat

doi:10.4236/tel.2015.54065

Cited by 2 publications

(2 citation statements)

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“…We note that the theory developed in our paper could be used in many areas, for example, Vorotnikova and Asci [35] developed an empirical estimation for multi-output production decision using multiple inputs in the profit maximizing We also note that mean-variance framework is related to stochastic dominance (SD) theory, see, for example, Wong [43] and Wong and Ma [44] for more information. Nonetheless, Rrisk measures are found to be interesting because they could be related to stochastic dominance theory and thus it is wellknown that domination by risk measures could be related to expected utility maximization, see, for example, Ma and Wong [44].…”

Section: Impacts Of Covariance Of Energy and Output Pricesmentioning

confidence: 99%

The Impacts of Joint Energy and Output Prices Uncertainties in a Mean-Variance Framework

Alghalith¹,

Niu²,

Wong³

2017

TEL

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In this paper, we analyze the impacts of joint energy and output prices uncertainties on the inputs demands in a mean-variance 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 non-risky 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 non-risky 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.

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Section: Impacts Of Covariance Of Energy and Output Pricesmentioning

confidence: 99%

The Impacts of Joint Energy and Output Prices Uncertainties in a Mean-Variance Framework

Alghalith¹,

Niu²,

Wong³

2017

TEL

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“… Vorotnikova and Asci () attempt to formulate a similar model; however, their formulation violates the fundamental economic production theory. In their proposed model, π * is symmetric negative semidefinite, and

{italicπ}_{r r}^{*} < 0 \forall r

.…”

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confidence: 99%

A New Empirical Output Allocation Model for the Competitive Multiproduct Firm

Seale

Önel

Zhu

2016

J of App Econs and Policy

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In this paper, based on Laitinen and Theil's (1978) theoretical model, we formulate an empirical output allocation model illustrating supply decisions of a profit‐maximising multiproduct firm. While theoretically elegant, Laitinen and Theil's (1978) output allocation model has never been formulated empirically in its general form due to the complexity of its nonlinear price deflator indexes. We close this gap in the literature by mathematically deriving the empirically tractable counterpart of the output allocation model. Our model does not rely on restrictions such as input–output separability or output independence, and it can easily be implemented by practitioners using standard econometric methods. We empirically illustrate the model using data constructed based on different production and cost functions.

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An Empirical Multi-Output Production Decision Model for the Profit Maximizing Multiproduct Firm

Cited by 2 publications

References 9 publications

The Impacts of Joint Energy and Output Prices Uncertainties in a Mean-Variance Framework

The Impacts of Joint Energy and Output Prices Uncertainties in a Mean-Variance Framework

A New Empirical Output Allocation Model for the Competitive Multiproduct Firm

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