This paper presents a unified treatment of the production and financial decisions available to a firm facing frictionless financial markets and a stochastic production technology under minimal assumptions on the firm's stochastic technology and objective function. The key concept is that of a...

A farmerÂ’s choices of tenure and farm size result from a complex interplay of economic factors technology, entrepreneurial ability, and personal preferences. This paper examines the qualitative effects of these factors on tenure and farm size in a dynamic optimization framework. One...

We identify conditions under which receipt of information in the form of a (potentially) ambiguous signal leads to a smoother maximin expected utility (MEU) preference structure which translates behaviorally into a smaller no-trade price zone. Narrowing of the no-trade price zone depends...

The central claim of this paper is that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems of consumer choice, the theory of the firm, and principal-agent relationships. This claim is illustrated by recent...

This paper studies the structure of state-contingent contracts in the presence of moral hazard and multitasking. Necessary and sufficient conditions for the presence of multitasking to lead to fixed payments instead of incentive schemes are identified. It is shown that the primary determinant of...