Regret-averse firms produce more than risk-averse counterparts under uncertainty.
The article explores how regret-aversion affects production decisions compared to risk-aversion. It shows that regret-averse firms will produce more than purely risk-averse firms but less than firms under certainty. The study also identifies conditions where regret-averse firms produce more than both risk-averse and linear-regret firms. This research provides valuable insights for production managers making decisions about production levels.