Increasing risk aversion in firms impacts duopoly outputs: study.
The article explores how risk aversion affects decision-making in business, focusing on a specific mathematical function. By combining two important mathematical concepts, the researchers develop a theorem called the CARA-NORMAL case and apply it to the theory of risk-averse oligopoly. They find that increasing risk aversion can impact the outputs of duopolies, with results depending on the level of risk aversion and product differentiation.