Uncertainty, Unanimity and the q-Theory of Investment

C. Carrera

Working Paper from Economics Department, Queen's University

Abstract: This paper presents a general equilibrium analysis under uncertainty of the firm's optimal investment decision. The set up is a well developed two-period model of a stock market economy. A theorem provides necessary and sufficient conditions for shareholder unanimity and a general investment decision is deduced. A particular case of the theorem, and the resulting decision rule, provide justification for the Q theory of investment.

Pages: 22
Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:469

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