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This paper aims at theoretical exploration of price and quantity setting behaviors of a monopolist encountering uncertain product demand within the mean‐risk frameworks. In the microeconomic literature, the relationships between price and quantity have been traditionally studied using the expected utility approach. This paper moves away from the traditional assumptions and compares various types of risk‐return approaches and explains why most of the monopoly firms follow pricing strategy instead of quantity setting strategy.

Price setting behavior and quantity setting behavior monopoly firms were examined with endogenous target value and comparative statics were used.

Comparison of various approaches reveals that risk‐averse customers might decrease purchases because of the price uncertainty or shift to other suppliers, which may explain why monopoly firms prefer their power over price setting rather than quantity setting.

The present study has introduced some testable propositions by comparing different behavioral models of price and quantity setting behaviors of a monopolist facing uncertain product demand.

This study contributes to understanding of firm's behavior in the face of uncertainty.

The conceptual nature of the paper makes the paper original in its contribution to the existing literature of the theory of firm.

The purpose of this paper is to provide a unified theoretical framework that explains farm capital structure choice.

The framework accommodates different credit access scenarios and heterogeneous risk profiles of borrowers. It recognizes that the costs of capital are endogenously determined, reflecting the degree of credit risk and accessibility to credit markets. Based on the proposed model and the comparative statics derived thereof, the paper empirically tests the impacts of different factors on capital structure choice.

Based on the theoretical framework, the paper derived the impacts of different factors on capital structure choice using comparative statics. Results suggest that the potential determinants of capital structure have varying effects at different ranges of leverage. Empirical evidence supports the theoretical model.

Despite all of previous work on various aspects of farm capital structure choice, a framework that encompasses each of the different assumptions and scenarios is still lacking. The theoretical model integrates credit risk models and accommodates endogenous cost of capital, providing a comprehensive framework for studying farm capital structure choice and its determinants. The results provide insights that could help policy makers and lenders develop effective instruments to manage, monitor, and influence the financial leverage of farms at different quantiles of debt ratio.

When the factor endowments of two trading countries do not lie in the same diversification cone, trade in commodities may not reduce the international factor return differentials. This chapter specifies some conditions of the demand function in a two-factor, infinite-good model that guarantee partial factor price equalization. The wage-rental ratios of two trading countries are convergent if goods farther apart are poorer substitutes than goods closer together in the factor-intensity ranking. This generalizes the result in the literature, which is usually obtained under the assumption of Cobb–Douglas utility and production functions.

The logic of economic inquiry requires two distinct research programs. One program treats economic life in terms of invariant formal categories across time and place. The other program treats the continual generation of novelty and turbulence through time and human interaction. These programs are not commensurable: one cannot be reduced to the other. The former program must be conveyed by a theory of equilibrium; the latter program requires a process-based theory of emergent phenomena. Roy Weintraub articulated a neo-Walrasian research program in his General Equilibrium Analysis, and here I sketch a complementary neo-Mengerian program. In presenting this sketch, I also explain that needless analytical confusion and antagonism can result from a failure to recognize that economic analysis requires two distinct research programs. As a historical side-bar, Carl Menger probably recognized this situation, as evidenced by his correspondence with Léon Walras.

We extend the Jones (1971) analysis of the effects of distortions in 2×2 trade models to the case of a two-sector dynamic general equilibrium model of a small open economy with capital accumulation. We do a comparative steady state analysis for the effect of policy changes on factor prices and the capital stock, and examine the dynamics of the system in the neighborhood of the steady state. We also show that the system will have multiple equilibria when value and physical factor intensity rankings of the sectors do not agree.

This chapter explores various aspects of mergers and acquisitions in the banking industry within a simple model that allows explicit comparison of sector performance before and after the mergers and acquisitions. The industry structure we look at involves a few dominant banks and a competitive fringe, which we take as the structure most likely to resemble the Turkish banking industry in the aftermath of the ongoing restructuring process. Using a reasonable set of parameters to simulate the model, we perform comparative statics exercises regarding the impact of mergers among domestic as well as with foreign banks on equilibrium outcomes.

This paper aims to investigate empirically the findings of an analytical impure public good model. The impure public good model described in this study allows for the application of different technologies generating public and private characteristics. The influence of the individual technologies on the total level of (impure) public good provision is of main concern in this study.

After the illustration of the impure public good model, the analytical results are compared to the results of a numerical approach based on climate policy in Germany.

The study shows that comparative static analyses do not always generate clear results. Therefore, the numerical approach is helpful to derive unambiguous results. The paper finds that technologies which exclusively generate private characteristics may have significant effects on total impure public good provision, since they may replace the private characteristics of the impure public good.

This paper provides useful information on the influence of the individual technologies on the total level of (impure) public good provision.

Using duality theory, we give a simple mathematical proof of some well‐known theorems of international trade theory. The two‐sector production model is described by a joint cost function from which the standard comparative statics results can be derived with little difficulty: all that is basically needed is the inversion of a Hessian matrix. This representation of the technology emphasises the importance of the assumption of non‐joint production, and it is useful for generalisation to many goods and factors, for treatment of intermediate products, and for empirical implementation.

The executive stock option (ESO) valuation model developed in this research amends the popular exchange traded option pricing models such as Black and Scholes (1973), Whaley (1981), and Cox, Ross, and Rubinstein (1979) to include economic features of the ESO contract that previously have been ignored. One of these features is the non‐transferability of the ESO, which creates a situation where the ESO might be exercised when an otherwise identical exchange traded option would not. Another feature is the hybrid nature of the ESO; it is not solely either an American option or a European option. The results of the comparative statics indicate that the impact of the non‐transferability of the ESO value is significant, whereas the hybrid feature of the ESO results in values that are very similar to American option values. The economic implication is that if an American or European option model is used to value ESO's, the probability is very high that a wealth transfer between management and shareholders will occur.

The pre‐commitment approach to bank capital regulation proposes that banks self‐select capital reserve requirements, facing penalties ex post for incurring losses in excess of reserves, hence providing incentives for high‐ risk banks to choose higher capital requirements. In order to assess the validity of the pre‐commitment approach, this article analyzes its comparative statics within the context of a standard European option written against the bank's capital base. The author finds that this approach works when it is not needed (when banks possess unlimited capital and hence cannot fail), but not when it is.