Risk Aversion and Price Risk in Duality Models of Production: A Linear Mean-Variance Approach

A duality model of production is developed that permits risk aversion and price uncertainty. The linear mean-variance framework employed is tractable for empirical research, in contrast to duality models of risk based on a generalized expected utility function. The framework is more general than in standard price certainty models while retaining the simplicity needed for empirical research.

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