Voting in Assemblies of Shareholders and Incomplete Markets

An economy with two dates is considered, one state at the first date and a finite number of states at the last date. Shareholders determine production plans by voting — one share, one vote — and at ?-majority stable stock market equilibria, alternative production plans are supported by at most ? × 100 percent of the shareholders. It is shown that a ?-majority stable stock market equilibrium exists if ? = S - J S - J + 1 , where S is the number of states at the last date and J is the number of firms. Moreover, an example shows that ?-majority stable stock market equilibrianeed not exist for smaller ?’s.