On the Theory of the Firm in an Economy with Incomplete Markets
AbstractThis article establishes conditions sufficient to ensure that a decision of a firm is judged to be desirable by any one shareholder (e.g., the firm's manager) if and only if every shareholder judges it to be desirable. One such condition is that the decision would not alter the set of distributions of returns available in the whole economy. Another is that shareholders are interested only in the mean and variance of the returns from their portfolios. The analysis allows for the possibility of incomplete markets.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 5 (1974)
Issue (Month): 1 (Spring)
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- Helpman, Elhanan & Razin, Assaf, 1978. "A theory of international trade under uncertainty," MPRA Paper 22112, University Library of Munich, Germany.
- Alan J. Auerbach, 1984.
"Taxation, Corporate Financial Policy and the Cost of Capital,"
NBER Working Papers
1026, National Bureau of Economic Research, Inc.
- Auerbach, Alan J, 1983. "Taxation, Corporate Financial Policy and the Cost of Capital," Journal of Economic Literature, American Economic Association, vol. 21(3), pages 905-40, September.
- John Bryant, 1978. "Approximately complete markets: a generalization of the states of the world model," Staff Report 33, Federal Reserve Bank of Minneapolis.
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