The competitive firm under price uncertainty: the role of information and hedging

Eckwert B, Broll U (2008)
Decisions in Economics and Finance 31(1): 1-11.

Journal Article | Published | English

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We study the impact of transparency in a commodity market on the decision problem of a competitive firm under price uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable signals which are correlated with the random price. We find that the impact of more transparency on labor employment and production depends on the firm’s technology. In particular, more transparency may result in lower average output even though on average more labor has been used in the production process. We also analyze the link between market transparency and the welfare of the firm.
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Eckwert B, Broll U. The competitive firm under price uncertainty: the role of information and hedging. Decisions in Economics and Finance. 2008;31(1):1-11.
Eckwert, B., & Broll, U. (2008). The competitive firm under price uncertainty: the role of information and hedging. Decisions in Economics and Finance, 31(1), 1-11.
Eckwert, B., and Broll, U. (2008). The competitive firm under price uncertainty: the role of information and hedging. Decisions in Economics and Finance 31, 1-11.
Eckwert, B., & Broll, U., 2008. The competitive firm under price uncertainty: the role of information and hedging. Decisions in Economics and Finance, 31(1), p 1-11.
B. Eckwert and U. Broll, “The competitive firm under price uncertainty: the role of information and hedging”, Decisions in Economics and Finance, vol. 31, 2008, pp. 1-11.
Eckwert, B., Broll, U.: The competitive firm under price uncertainty: the role of information and hedging. Decisions in Economics and Finance. 31, 1-11 (2008).
Eckwert, Bernhard, and Broll, Udo. “The competitive firm under price uncertainty: the role of information and hedging”. Decisions in Economics and Finance 31.1 (2008): 1-11.
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