Corporate Equilibrium Properties of a Centralized Objective Function GEI Model
We introduce an incomplete markets general equilibrium model with idiosyncratic risk, where production is financed via stock market, and where the ownership structure endogenized. This model is a variation of Drèze (1974), Grossman and Hart (1979), and Magill and Quinzii (2002). The paper discusses two main corporate equilibrium properties. It shows that (i) the class of centralized objective functions introduces a further source of inefficiency into the organization of production, and (ii) the indeterminacy of corporate equilibria. (iii) It further shows the separation of the economic decisions of the agents.
|Date of creation:||Jul 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:yor:yorken:10/18. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Hodgson)
If references are entirely missing, you can add them using this form.