CONTENTS
1. Introduction
2. General Definitions of Joint and Non-joint Stochastic
Technologies
3. Ex ante Cost functions of Joint adn Non-jiont Stochastic
Techonlogies
4. Identification of Economies of Scope using Separability
restrictions on Risk
5. Conclusions
ABSTRACT
Three restricted specifications of a stochastic technology that enable
economies of scope to be identified are defined in the study. For each
specification, the results of this study exactly parallel those obtained by
Panzar and Willig (1981) for defining economies of scope using a non-stochastic
technology. Sub-additivity of the individual ex ante cost function of each
output is a sufficient condition for multi-output firms operating in a
stochastic production environment.
