Shareholders Unanimity with Incomplete Markets

  title={Shareholders Unanimity with Incomplete Markets},
  author={Eva C{\'a}rceles-Poveda and Daniele Coen-Pirani},
When markets are incomplete, shareholders typically disagree on the …rm’s optimal investment plan. This paper studies the shareholders’preferences with respect to the …rm’s investment in a model with aggregate risk, incomplete markets and heterogeneous households who trade in …rms’shares instead of directly accumulating physical capital. If the production function exhibits constant returns to scale and borrowing limits are not binding, a …rm’s shareholders unanimously agree on its optimal level… CONTINUE READING

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