Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-11-30T23:10:19.124Z Has data issue: false hasContentIssue false
  • English
  • Français

On a shareholder constrained efficient criterion for strategic firms

Published online by Cambridge University Press:  17 August 2016

Luigi Ventura
Luigi Ventura*
Affiliation:
University of Rome “La Sapienza”†
Get access

Summary

In this note the decision problem of a strategic firm in a general equilibrium setting is analyzed. It is shown that a problem of unanimity arises when such a firm has many shareholders, and that a well known criterion used in the case of market incompleteness can be quite interestingly transposed to an imperfectly competitive framework.

Résumé

Résumé

Dans cette note, nous analysons le problème de décision rencontré par une firme stratégique en équilibre général. Nous montrons qu’un problème d’unanimité surgit quand il y a de nombreux actionnaires, pour le résoudre nous suggérons de transposer à ce cadre de concurrence imparfaite un critère fréquemment utilisé dans l’analyse des marchés incomplets.

Keywords

imperfect competition,shareholders’ unanimity,incomplete markets.D21,D52,D70.D21,D52,D70.
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 65 , Issue 3 , 1999 , pp. 283 - 300
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1999 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

The author is gratefully indebted to prof. R. Amir, C.d’Aspremont, J. Drèze, J. Gabszewicz, J.F. Mertens, H. Polemarchakls and two anonymous referees for very useful discussions and suggestions. The usual disclaimer applies. Acknowledgements are due also to Human Capital and Mobility Program and M.U.R.S.T. 60% for financial support.

†

Dipartimento di Scienze Economiche, Via A. Cesalpino, 12-14 1-00161 Roma; e-mail : [email protected]

References

Böhm, V.,(1990), General equilibrium with profit maximizing oligopolists, Discussion Paper n. 414-90, Universität Mannheim.Google Scholar
Böhm, V., (1994), The foundation of the theory of monopolistic competition Revisited, Journal of Economic Theory, 63.Google Scholar
Cornwall, R.R., (1977), The concept of general equilibrium in a market economy with imperfectly competitive producers, Metroeconomica 29.Google Scholar
Debreu, G., (1959), Theory of Value, Wiley, New York.Google Scholar
DeMarzo, P.M., (1993), Majority Voting and Corporate Control: the Rule of the Dominant Shareholder, Review of Economic Studies, 60.Google Scholar
Dierker, E. and Grodal, B., (1993), Profit maximization mitigates competition, mimeo.Google Scholar
Dierker, E. and Grodal, B., (1996), The Price Normalization Problem in Imperfect Competition and the Objective of the Firm, University of Copenhagen, Institute of Economics, Discussion Paper 96/05.Google Scholar
Dierker, E. and Grodal, B., (1995), Profit Maximization, Relative Prices, and the Maximization of Shareholders’ Real Wealth, University of Copenhagen, Institute of Economics, Discussion Paper 95/07.Google Scholar
Dierker, H. and Grodal, B., (1986), Non Existence of Cournot-Walras Equilibrium in a General Equilibrium Model with two Oligopolists, in Hildenbrand, W. and Mas Colell, A. eds., “Contributions to Mathematical Economics”, North Holland.Google Scholar
Dréze, J., (1974), Investment under private ownership: optimality, equilibrium and stability, in Drèze, J. (ed.), in “Allocation under uncertainty: equilibrium and optimality”, Wiley, New York.Google Scholar
Gabszewicz, J. and Vial, J.P., (1972), Oligopoly à la Cournot in General Equilibrium Analysis, Journal of Economic Theory, 4.Google Scholar
Gabszewicz, J.J. and Michel, P., (1994), Oligopoly Equilibrium in Exchange Economics, mimeo.Google Scholar
Geanakoplos, J., Magill, M., Quinzii, M. and Drèze, J., (1990), Generic inefficiency of stock market equilibrium when markets are incomplete, Journal of Mathematical Economics 1990.Google Scholar
Grodal, B., (1984), Profit Maximizing Behaviour in General Equilibrium Models with Imperfect Competition, in Economic Essays, 28, Akademisk-Forlag Kobenhaven.Google Scholar
Roberts, D.J. and Sonnenschein, H., (1976), On the Existence of Cournot Equilibrium without Concave Profit Functions, Journal of Economic Theory, 13.Google Scholar