IDENTIFICATION OF ECONOMIES OF SCOPE IN A STOCHASTIC PRODUCTION ENVIRONMENT

Abstract

This paper extends the definition of economies of scope to multioutput firms that face an uncertain production environment. Identification of economies of scope in this environment, however, requires separability assumptions on the technology. These identification restrictions are demonstrated in the paper, and for each identification restriction the definition of economies of scope is generalized to the case of uncertain production and risk aversion.Production Risk, Multioutput, Production, Identification, Risk and Uncertainty,