Proxy fights in incomplete markets: when majority voting and sidepayments are equivalent

Abstract : This article provides a study of corporate control in a general equilibrium framework for production economies. When markets are incomplete, trading assets does not allow agents to fully resolve their conflict of interest: at the market equilibrium, shareholders disagree on the way to evaluate production plans which ly outside the market span, and the objective function of the firm is not well defined. Two ways of resolving these conflicts are compared here. The first one (see, e.g., Dr'eze (1974) and Grossman & Hart (1979)) relies on sidepayments between shareholders. The second one (see, e.g., Dr'eze (1985) and DeMarzo (1993)) relies on majority voting in the assembly of shareholders: a stable production plan is one which cannot be overruled by a majority of shareholders. Since voting occurs in a multi-dimensional setup, super majority rules are needed to ensure existence of such 'political' equilibria. The most interesting equilibria are those which are stable with respect to the super majority rule with smallest rate. The present paper provides a framework where these two approaches yield the same equilibria.
Type de document :
Pré-publication, Document de travail
Liste complète des métadonnées

Littérature citée [28 références]  Voir  Masquer  Télécharger
Contributeur : Spire Sciences Po Institutional Repository <>
Soumis le : mercredi 17 septembre 2014 - 16:09:29
Dernière modification le : mardi 18 juin 2019 - 01:11:26
Document(s) archivé(s) le : jeudi 18 décembre 2014 - 11:36:38


Fichiers produits par l'(les) auteur(s)


  • HAL Id : hal-01065004, version 1
  • SCIENCESPO : 2441/10282



Hervé Crès, Mich Tvede. Proxy fights in incomplete markets: when majority voting and sidepayments are equivalent. 2001. ⟨hal-01065004⟩



Consultations de la notice


Téléchargements de fichiers