A macroeconomic model
In an incomplete asset market, firms compute the value of production plans by approximating them with the payoffs of portfolios of marketed assets; equivalently, by projecting their payoffs on the span of the payoffs of marketed assets; equivalently, they apply the capital asset pricing model (capm). This is a criterion that does not require firms to possess information not revealed by the prices and payoffs of marketed assets, such as the marginal valuation by shareholders of revenue in different states of the world, which is not observable. Competitive equilibria exist under standard assumptions. Competitive equilibrium allocations are typically constrained suboptimal. They are typically determinate, if firms consider the commodity payoffs of shares; even in the absence of other, nominal assets, they are typically indeterminate if firms consider the revenue payoffs of shares.
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