A Theorem on the Decentralization of the Objective Function of the Firm in GEI

Pascal Stiefenhofer

Discussion Papers from Department of Economics, University of York

Abstract: This paper introduces a separation theorem for a two period general equilibrium model with endogenized asset structures and incomplete income transfer space. This theorem separates the activities of the consumers from the activities of the firms. The result improves on the objective function introduced in Drèze (1974) and Grossman and Hart (1979), which is not independent of an exogenously assigned present value derived from the utilities of the owners of the firm.

Keywords: Objective Function; Incomplete Markets; Pro t Maximization (search for similar items in EconPapers)
JEL-codes: D20 D21 D52 (search for similar items in EconPapers)
Date: 2010-06
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