Corporate Control and the Stock Market

Stefano Demichelis and Klaus Ritzberger

No 60, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: This paper studies a general equilibrium model with an investor controlled firm. Shareholders can vote on the firm’s production plan in an assembly. Prior to that they may trade shares on the stock market. Since stock market trades determine the distribution of votes, trading is strategic. There is always an equilibrium, where share trades lead to owners deciding for competitive behavior, but there may also be equilibria, where monoplistic behavior prevails.

Keywords: Corporate governance; general equilibrium; objective function of the firm; shareholder voting; stock markets. (search for similar items in EconPapers)
JEL-codes: D21 D43 D51 G32 G34 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2007
New Economics Papers: this item is included in nep-bec, nep-cdm and nep-cse
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:60

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