We consider a seller with uncertain demand for its product. If the demand curve were certain, then setting price and setting quantity would be equivalent ways to frame the seller’s problem of choosing a profit-maximizing point on its demand curve. With uncertain demand, these become distinct sales mechanisms. We distinguish between uncertainty about the market size and uncertainty about the con...

This paper examines the effect of the regulations restricting price increases on the evolution of pharmaceutical prices. A novel theoretical model shows that this policy leads firms to price new drugs with uncertain demand above the expected value initially. Price decreases after drug launch are more likely, the higher the uncertainty. We empirically test the model's predictions using data from...

Water shortage crisis is an issue that has led to drastic changes in different agricultural policies, especially in arid and semi-arid areas. Uncertainty in the amount of resources, e.g. water, used for agricultural production entails risk for farmers' income and cropping pattern changes. In the present study, the robust optimization model was used for optimal allocation of arable lands of Khor...

We study a special form of securities market circuit breaker, i.e., European volatility interruptions. Instead of halt trading like traditional circuit breaker, these short-living call auctions allow for continual price discovery after price limit hits. Based upon approximately 1,800 Xetra volatility interruption events from 01/2009 to 01/2012, we empirically assess whether such auctions contri...

Our objective is to determine if a first-price auction or a posted-price market provides a seller with the larger expected revenue when buyers have a common value for the item being sold. An agent-based, posted-price market and an agent-based, first-price common-value auction with a reserve price are developed to compare these selling methods. When the seller cannot impose a reserve price in th...

This paper studies the macroeconomic effects of commodity price uncertainty (CPU) shocks. Using Australia as a case study, an econometric-based CPU index is proposed to reveal that has experienced unprecedented increase in from market recently. Evidence VAR model shows shocks have larger recessionary impact than other relevant such financial, economic and trade policy uncertainty. The empirical...