Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92450
Authors: 
Smolny, Werner
Year of Publication: 
1994
Series/Report no.: 
Discussion Paper, Center for International Labor Economics (CILE), University of Konstanz 12
Abstract: 
In the paper, a model of the firm with a delayed adjustment of prices and supply is analyzed. Prices and supply are determined under uncertainty about the location of the demand curve. Three models are distinguished: a price setting with predetermined supply, supply determination with predetermined prices, and a simultaneous price and supply determination. It is shown that many of the results of the deterministic case can be transferred to this stochastic model set-up. The deterministic model is included as a special case of the presented model. However, the model here allows for supply rigidities and labour hoarding and permits the analysis of price adjustment and rationing situations.
Subjects: 
monopolistic price setting
adjustment delays
Document Type: 
Working Paper

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