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Shareholder Unanimity: A Survey from the Viewpoint of Incomplete Markets

Author

Listed:
  • Michael Zierhut

    (Graduate School of Economics, Kobe University)

  • Chiaki Hara

    (Institute of Economic Research, Kyoto University)

Abstract

Textbook treatments often identify the objective of the firm with profit maximization, presuming this would be in the interest of its shareholders. We study this hypothesis from the viewpoint of general equilibrium theory with incomplete markets. When the financial market is incomplete, profit maximization is not a welldefined concept, and conflicts of interest between shareholders are likely.We survey major contributions to the theory of shareholder unanimity, based on a categorization into four unanimity criteria. These criteria can be met in certain well-defined classes of economies, although not necessarily through the maximization of profit.

Suggested Citation

  • Michael Zierhut & Chiaki Hara, 2025. "Shareholder Unanimity: A Survey from the Viewpoint of Incomplete Markets," KIER Working Papers 1112, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1112
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    More about this item

    Keywords

    Capital Asset Pricing Model; ESG; General equilibrium; incomplete asset markets; shareholders unanimity; Dreze criterion; vector bundle;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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