Voting in assemblies of shareholders and incomplete markets |
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Authors: | Mich Tvede Hervé Crés |
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Institution: | (1) Institute of Economics, University of Copenhagen, Studiestraede 6, 1455 Copenhagen K, Denmark;(2) Département de finance et économie, HEC Paris, Rue de la Libération, 78351 Jouy-en-Josas, France |
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Abstract: | Summary. An economy with two dates is considered, one state at the first date and a finite number of states at the last date. Shareholders determine production plans by voting - one share, one vote - and at
-majority stable stock market equilibria, alternative production plans are supported by at most
percent of the shareholders. It is shown that a
-majority stable stock market equilibrium exists if
where S is the number of states at the last date and J is the number of firms. Moreover, an example shows that
-majority stable stock market equilibria need not exist for smaller
s.Received: 23 December 2002, Revised: 14 June 2004, JEL Classification Numbers:
D21, D52, D71, G39.
Correspondence to: Hervé CrésThe authors are grateful to an anonymous referee for helpful comments and suggestions. Financial support from the Danish Research Councils and hospitality of HEC is gratefully acknowledged by Mich Tvede and support from Fondation HEC is gratefully acknowledged by Hervé Crés. |
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Keywords: | General equilibrium Incomplete markets Production Shareholders voting" target="_blank">gif" alt="rsquo" align="BASELINE" BORDER="0"> voting Super majority |
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