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Fakultät Wirtschaftswissenschaften, Technische Universität Dresden >
Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden >
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http://hdl.handle.net/10419/22753
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| Title: | | The Competitive Firm Under Price Uncertainty: The Role of Information and Hedging  |
| Authors: | | Broll, Udo Eckwert, Bernhard |
| Issue Date: | | 2007 |
| Series/Report no.: | | Dresden discussion paper in economics 12/07 |
| Abstract: | | 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. Inparticular, 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. |
| Subjects: | | Transparency information system price uncertainty hedging competitive firm |
| JEL: | | L23 L25 L21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden
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