Shareholder Unanimity: A Survey from the Viewpoint of Incomplete Markets

Michael Zierhut () and Chiaki Hara ()
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Michael Zierhut: Graduate School of Economics, Kobe University
Chiaki Hara: Institute of Economic Research, Kyoto University

No 1112, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: Textbook treatments often identify the objective of the firm with profit maximization, presuming this would be in the interest of its shareholders. We study this hypothesis from the viewpoint of general equilibrium theory with incomplete markets. When the financial market is incomplete, profit maximization is not a welldefined concept, and conflicts of interest between shareholders are likely.We survey major contributions to the theory of shareholder unanimity, based on a categorization into four unanimity criteria. These criteria can be met in certain well-defined classes of economies, although not necessarily through the maximization of profit.

Keywords: Capital Asset Pricing Model; ESG; General equilibrium; incomplete asset markets; shareholders unanimity; Dreze criterion; vector bundle (search for similar items in EconPapers)
JEL-codes: D21 D51 D52 D53 G12 Q51 (search for similar items in EconPapers)
Pages: 38pages
Date: 2025-03
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