I study a dynamic production problem with uncertainty about demand in a monopolistic market regime. The monopolist’s objective is to find a production plan that maximizes the expected profit by balancing the incentive to increase revenues and the cost of information gathering. A closed solution is given under the assumption of a uniform probability distribution of demand. The optimal production in each period is shown to be an adaptive learning process.

Uncertain demand and the gathering of information: a discrete dynamic perspective

Bertarelli, Silvia
Primo
2024

Abstract

I study a dynamic production problem with uncertainty about demand in a monopolistic market regime. The monopolist’s objective is to find a production plan that maximizes the expected profit by balancing the incentive to increase revenues and the cost of information gathering. A closed solution is given under the assumption of a uniform probability distribution of demand. The optimal production in each period is shown to be an adaptive learning process.
2024
Bertarelli, Silvia
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11392/2555571
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