A Stochastic Theory of Production Correspondences.
CALIFORNIA UNIV BERKELEY OPERATIONS RESEARCH CENTER
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An axiomatic model of production technology under uncertainty is formulated from a purely technical point of view as a generalization of Shephard 1970-a and ShephardFare 1980s framework for a general theory production. The uncertain technical feasibility of production is characterized by inversely related stochastic input and output correspondences. This model of technology is then synthesized with a Radner 1968 type model of information for a formulation of production policies. This synthesis is used to give formulations of laws of returns under uncertainty. Finally, a generalized notion of homothetic production correspondences is developed to give special-structured stochastic production models which allow explicit consideration of optimal production policies. Author
- Statistics and Probability