Consumer’s Welfare and Price Uncertainty
The measurement of welfare under price uncertainty is an issue economists discovered already some decades ago. Waugh (1944) investigated the benefits of price stabilization. He considered the consumer’s case. Oi (1961) explored the implications of price variability to expected profits. Massell (1969) integrated the consumer and producer sides of the picture. Recently Newbery and Stiglitz (1981,1982) extended that kind of analysis.
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