The Existence of Equilibrium and the Objective Function of the Firm
AbstractWe consider an economy in which firms' decisions are made by a collective decision of the shareholders. The main result shows that the simultaneous existence of an exchange equilibrium in the market for shares and a voting equilibrium in the internal decisions of firms. We present our results in a general framework, with a measure space of agents. Our framework covers the cases of incomplete markets and externalities between firms and shareholders. We show that a voting rule due to Kramer is a special case.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 867.
Date of creation: Sep 1992
Date of revision:
shareholder voting; incomplete markets; sophisticated voting; objective function of the firm;
Other versions of this item:
- Kelsey, D. & Milne, F., 1992. "The Existence of Equilibrium and the Objective Function of the Firm," Discussion Papers 92-22, Department of Economics, University of Birmingham.
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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