The Existence Of Equilibrium And The Objective Function Of The Firm

David Kelsey and Frank Milne

No 867, Working Paper from Economics Department, Queen's University

Abstract: We consider an economy in which firms' decisions are made by a collective decision of the shareholders. The main result shows that the simultaneous existence of an exchange equilibrium in the market for shares and a voting equilibrium in the internal decisions of firms. We present our results in a general framework, with a measure space of agents. Our framework covers the cases of incomplete markets and externalities between firms and shareholders. We show that a voting rule due to Kramer is a special case.

Keywords: objective function of the firm; shareholder voting; incomplete markets; sophisticated voting (search for similar items in EconPapers)
JEL-codes: D52 D70 L20 (search for similar items in EconPapers)
Pages: 0 pages
Date: 1992-09
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