This paper shows how standard arguments supporting the imposition of price caps break down in the presence of demand uncertainty. In particular, though in the deterministic case the introduction or lowering of a price cap (above marginal cost) results in increased production, increased total welfare, decreased prices, and increased consumer welfare, we show that all of the above comparative sta...

National reporting organizations and regulatory bodies for the minerals and mining sector are requiring publicly reported OreReserve estimates to take account of uncertainties. Whilst methodologies that account for physical uncertainty appear relatively well developed, methodologies which can take account of economic uncertainty appear much less so. To counter this shortfall, we present an effi...

We analyze the effect of price caps on equilibrium production and welfare in oligopoly under demand uncertainty. We find that high price caps always increase production and welfare as compared to the situation without price cap. Price caps close to marginal cost may lead to zero production, depending on the nature of uncertainty. We characterize the optimal price cap and show that typically, th...